VAN DER RHEEDE: US TARIFFS ARE PUNITIVE AND WILL BACKFIRE

Thu 31 July 2025:

Executive Director of the FW de Klerk Foundation and Former Executive Director at Agri SA, Christo van der Rheede, believes the looming United States tariffs on South African exports are punitive and will ultimately harm them.

With President Donald Trump’s August 1st deadline for 30% tariff hikes approaching, South Africa faces a trade crisis threatening its automotive and agricultural sectors.

South Africa’s agricultural industry, known for premium wines, citrus, macadamia nuts, and ostrich products, is facing significant pressure.

Although a smaller percentage of agricultural exports go to the US compared to Africa and Europe, certain regions rely heavily on this market. Van der Rheede said these tariffs are designed to punish rather than promote fair trade.

“This is no longer about fair trade. It’s about punitive measures. It’s about punishment. And that will come back to haunt the United States,” he warned.

“America will find it very difficult to become self-sufficient because we’re all part of a global value chain… the American consumer is going to pick up the brunt of this.”

The end of South Africa’s duty-free access under AGOA will further complicate trade. Exporters must now consider alternative markets while coping with regional economic disruptions.

Van der Rheede stated that while the national economy may not collapse, specific industries will be severely impacted.

“AGOA is no longer in existence… our cars and agricultural produce will be subjected to 30%. Regions where we produce ostrich leather and meat will have to find new markets, ” he said.

“It will not have a significant impact overall, but it will have a regional negative impact because certain products have become really dependent on exporting to the United States.”

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Pivoting to New Markets

With traditional access to the US market closing, South Africa is exploring opportunities with China, the EU, and other regions.

China has introduced tariff-free benefits for African exporters, and the EU has relaxed specific barriers. Van der Rheede said these developments could help offset losses but criticised the government’s slow response.

He noted that South Africa’s economic structure and reliance on exporting raw commodities continue to undermine trade resilience and job creation.

“Why did it take the Department of Trade and Industry so long to come up with a counter strategy… this should be a wake-up call for our government,” he said,

“We have to reflect on why South Africa is just a producer of raw commodities that come back as final products. No wonder we sit with this massive unemployment crisis.”

The government’s late attempt to negotiate with the US, including a proposed R60 billion investment deal, has drawn further criticism.

Van der Rheede stated that the country lacked foresight and failed to capitalise on regional opportunities to strengthen its position before tariffs were imposed. He warned that poor planning and self-interest among leaders would worsen the situation for ordinary South Africans.

“They slept on the job… South Africans are going to suffer as a result of pure incompetence, a lack of foresight and a lack of really leveraging the opportunities that exist within the southern region and the African continent. Self-serving interests are reigning supreme at the expense of our people.”

written by Thaabit Kamaar