Imposed 30% tariffs coming into effect this month will be another contributor to unemployment

South Africans will be dealt another blow as the US introduces 30% trade tariffs, coming into effect this August.

Trade Wars or an opportunity for Africa to emerge as an economic force?

As of earlier this month, 90 countries have been affected by the tariffs imposed by United States President Donald Trump, stemming from a need to address trade deficits. Many are calling this a significant attempt to reorder the global trade hierarchy.

This move by the US aims to directly position US domestic manufacturing as a competitor to Africa’s largest textile industries, favouring the domestic production of goods in the US. Lesotho and Kenya are two of the largest textile exporters in Africa. These tariffs will have the greatest impact on the respective textile industries. Secondly, much speculation has centred on the idea that the US is exerting its power on the globe to indirectly punish countries that have policy positions that contradict those of the US.

While different tariffs apply to different countries, Brazil, India, and Lesotho were initially slapped with a 50% rate, which was later adjusted to 15% earlier this month following attempts by Lesotho’s Minister of Trade, Industry, Business Development, and Tourism to lobby the US government. Despite the adjustment, Lesotho’s textile industry has already suffered a blow; the announcement of the tariffs resulted in approximately 36,000 job losses. As the industry employs close to a third of the country’s population, making it one of the largest employers in the country, this has had a significant impact on the country’s unemployment rate, with women being disproportionately affected. 

South Africa is also not exempt, as we face a 30% tariff rate on all South African goods entering the US market. While the country relies heavily on exports such as cars, steel, and citrus, this will have further implications, considering our already fragile economy. The tariffs leave a sombre note for South Africa, considering the estimated 100,000 jobs that will be lost, particularly in the automotive and agricultural sectors. This is a significant blow to unemployment statistics, which already rose to 32.9% in the first quarter of 2025, the highest level in a year, up from 31.9% in the fourth quarter of 2024. This translates to 8.2 million unemployed individuals as is.

This presents a deepening crisis, signalling the end of the African Growth and Opportunity Act (AGOA). While not explicitly stated, it is worth noting that the AGOA gives South Africa duty-free access to the US for more than 6,000 products, including goods in the automobile, agricultural, and textile industries. This tariff hike will unquestionably affect every South African business, entrepreneur, farmer, manufacturer, miner and all others who export goods and produce to the United States, who are confronting this news with worry and uncertainty.

Meanwhile, President Cyril Ramaphosa reaffirms South Africa’s commitment to continuing its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States. President Cyril Ramaphosa has been judged to have glossed over a critical relationship with their USA counterpart, as the United States is South Africa’s second-largest trading partner after China.

This current economic outlook also reflects growing tensions with Washington over domestic and foreign policy. With speculations that the imposed tariffs are a result of the false allegations of the seizure of land from white farmers, the US President has unequivocally expressed his strong opposition to South Africa’s land reform and the Expropriation Act, which is a prolific reform required to redress injustice imposed by the Apartheid government in relation to land ownership. Another factor that plays somewhat of a role is South Africa’s bold move to file a genocide case against Israel at the International Court of Justice, fuelling diplomatic tensions between the two countries.

Currently, it appears that there is no way forward in remedying the deepening relations with the US.  President Ramaphosa has been urged to persuade the White House to reconsider and strike a better deal, citing South Africa’s status as a sovereign state and emphasising that trade relations should not be based on political vendettas.

First, it was cuts to financial aid, which also had its resulting implications, including job losses. One of the major takeaways was that the government needs to reduce its reliance on foreign funding, particularly in addressing pressing public healthcare issues. The resulting impact of high tariffs is that African countries have an opportunity to strengthen their trade with other economic powerhouses, such as China, the European Union (EU), and countries in the Global South.

Despite the current realities, the Department of Trade, Industry and Competition has responded hastily by launching a support strategy to mitigate the economic impact.  This includes the establishment of an export support desk to assist South African businesses in navigating new international markets. They will play a key role in offering tailored advice on compliance requirements, guidance on market entry processes and alternative destinations for exporters. A Local Production Fund has also been set up to incentivise import substitution and ultimately absorb job losses. For more information, it is advisable to contact the DTIC’s website for timely updates.

Without question, South Africa is facing perilous times and exploration with trade partners such as the European Union and BRICS partners. tha need a game changing necessity. South Africa can also seek intervention measures with the African Continental Free Trade Agreement which can alleviate the current tariffs shock which are pounding heavily on the withering economy which has produced an increased joblessness, hopelessness and despondency.

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About the Author:

Lebogang Victor Ditsebe is a 2018 Activator from Kimberley, Northern Cape. Member of the Writers Hub, Civic Champion for the Holding Local Government accountable programme for ACTIVATE Change Drivers and a passionate disability rights awareness advocate.