South Africa now faces a 30% tariff on its exports to the US, and the country’s agricultural products are at a disadvantage relative to those of competitor countries, such as Peru and Chile, that pay a much lower tariff of about 10%, Agricultural Business Chamber of South Africa (Agbiz) chief economist Wandile Sihlobo writes in the entity’s Agricultural Trade Digest on August 1.

The most exposed agricultural industries include ostrich products, table grapes, citrus, nuts and wines, among others, he points out.

However, the announcement of the current tariff does not signal the end of the road, with negotiations continuing, and South African authorities working on refining its offer to the US ahead of the August 7 tariff implementation date, Sihlobo assures South Africans.

He posits that representatives from the departments of Trade, Industry and Competition, Agriculture, and International Relations and Cooperation, along with colleagues from The Presidency, will likely visit the US soon to persuade its administration to implement more favourable tariff levels.

However, these negotiations, as has been experienced in other countries, are proving to be challenging, Sihlobo cautions.

He cites the example of the US placing significantly higher tariff rates on several countries, such as the EU and Japan, which face tariffs of between 15% and 20% even after the “new deals” agreed with the US.

“These higher tariffs illustrate that the path ahead will be challenging for South Africa as the country negotiates while it is still in the process of mending its relations,” Sihlobo explains.

There is also uncertainty on whether Peru and Chile will see any change in their tariff regimes; however, at current levels, they have a far bigger advantage over South Africa, putting the country’s exports at a slight disadvantage, he asserts.

“We continue to work in support of the South African government to refine its offering as the US market remains vital to South Africa’s agricultural sector, and many sectors of our economy.

“The possible economic fallout on our various industries has been well communicated to the government for consideration and urgency as the process continues. Currently, we remain in a state of profound uncertainty, which is costly to businesses,” Sihlobo states.