JING CHIEN AND LAWRENCE EDWARDS | Trump’s latest tariffs leave SA exposed

The relief South African exporters won when the 30% reciprocal tariff imposed by US president Donald Trump was declared unlawful by the US supreme court in February was short-lived.

The reciprocal tariffs on all countries were immediately replaced by a uniform 10% duty that expired on July 24. Those have now been replaced by new tariffs imposed under Section 301 of the Trade Act of 1974 on countries deemed to have failed to prohibit trade in products made with forced labour.

South Africa falls in the group targeted at the higher 12.5% rate, despite the government seeking exemption during the public hearings hosted by the office of the US trade representative.

On the face of it, the additional 12.5% is a far better outcome than the 30% reciprocal tariff. But the reprieve is narrower than it appears.

Our estimates using highly disaggregated US import data suggest that replacing the 30% reciprocal tariff with the 12.5% Section 301 tariff only reduces the import-weighted average tariff on South African non-gold exports from 16.9% to 11.2%. Removing the Section 301 tariffs entirely would still leave the average at 7.4%, which is nearly 20 times the 0.4% average at the beginning of 2025.

There are two main reasons. First, the tariff increases exclude major US imports from South Africa, such as the platinum group metals (PGMs), citrus and gold. Exempted products cover over 40% of the value of US imports from South Africa.

Second, the Section 301 tariffs do not apply to vehicles, iron and steel, aluminium and copper products, which face separate Section 232 “national security” tariffs of 25%-50%. The 12.5% tariff therefore applies to only a fraction of the value of South Africa’s exports to the US.

However, the aggregate story hides a lot. Over 80% of the roughly 2,700 products the US imported from South Africa in 2024 face the Section 301 tariff. These products are of low aggregate value, but the US is a major market for many of them. While exemption of the tariffs for these products would have mattered little to the total value of South African exports, it matters a great deal for most of the products South Africa sells to the US.

Using a highly disaggregated, product-level trade model (based on 2024 data), we project that the tariffs will cut South African exports directly affected by them by about $1.9bn (a 23% decline) under the proposed 12.5% tariff, down from $3.5bn (42%) under the 30% reciprocal tariff. The number of jobs threatened, directly and indirectly, drops from about 87,700 to 45,500 — still a major hit, and one that falls disproportionately on women.

Vehicles are hardest hit, not by the Section 301 tariffs but by the 25% Section 232 tariffs, with exports to the US predicted to fall by 58%. Chemicals and basic metals are also strongly affected.

Our results also highlight the importance of the gap between the tariffs SA exporters face and those faced by their competitors.