South African exporters are being urged to brace for rising costs, with a 30% US tariff on all goods from the country now officially set to take effect on 1 August.

The measure, part of former US President Donald Trump’s renewed trade agenda, follows a temporary 10% rate. It is set to impact cross-border trade.

The August tariff became official after US President Donald Trump confirmed it in a letter to President Cyril Ramaphosa on Monday.

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Cornelius Coetzee, the South Africa Country Director at Verto, a cross-border payments provider, says these tariffs will create a very complex and challenging environment for local businesses.

“These tariffs are designed to target South Africa’s manufactured goods, especially sectors like automotive and metals, undermining our industrial capabilities by limiting access to export markets for processed products,” Coetzee warned.

He added that the removal of the African Growth and Opportunity Act (AGOA), further complicates matters as products from African countries will no longer be US duty-free. This, he says, also contributes to currency volatility and heightens the risk of a broader global slowdown.

Tips for local businesses

Coetzee says 76% of South African exports to the US, however, are largely exempt from higher tariffs. This includes critical minerals like Platinum Group Metals and titanium.
Tips for local businesses.

Coetzee has issued some recommendations for affected businesses. These include diversifying export markets, optimising operational costs, and partnering with both government and industry bodies to navigate the new trade landscape.

He broke it down further below:

• Market diversification is paramount: South Africa is already engaging with countries in Asia and the Middle East. Finding new markets where export prices are acceptable and competitive will lower any negative impact of the U.S. tariffs.
• Streamline operations and cut costs: To remain competitive, businesses may need to absorb some tariff costs. This necessitates maximum efficiency, looking for ways to cut costs and streamline operations to maximise every cent.
• Collaborate with government and industry: The South African government and industry associations need to develop programs that help affected companies find and access new markets. We need intergovernmental task teams to prioritise agreements and protocols, and trade missions to support firms in finding new customers and establishing new supply chains.
• Understand your value proposition: Re-evaluate what makes your product unique and indispensable. If the U.S. truly relies on what you’re selling, even with tariffs, they might still buy. Focus on your competitive advantages and develop go-to-market strategies to still gain market share.
• Stay informed and stay agile: Trade policies are a moving target and can still change. Companies that can pivot their strategies and approaches will be sure to be ahead.

“The key is to de-risk market entry by overcoming local financial complexities,” said Coetzee.