Neelam Rahim | neelam@radioislam.co.za

3-minute read
04 April 2025 | 15:30 CAT

The local automotive industry now faces uncertainty following the US’s sudden 31% tariff hike. (File Photo – Lee Rondganger/IOL)

South Africa’s key export sectors face an uncertain future after US President Donald Trump announced sweeping reciprocal tariffs on up to 20 African countries—including South Africa. The new regime includes a 31% tariff hike on certain South African goods, particularly impacting agricultural exports and the automotive industry.

Economist and WITS Senior Lecturer, Dr. Lumkile Mondi, says the implications are far-reaching. “Most of our goods going to the US will become more expensive for American consumers… and will favour a subsidised good in the domestic market,” he explains in an interview with Radio Islam International. In practical terms, this will reduce demand for South African exports and may result in significant economic losses.

Of particular concern is the automotive sector, which currently sees around 30% of its exports headed to the US. “We may lose a substantial part of that 30%,” warns Dr. Mondi, emphasising the risk this poses to employment and growth in South Africa.

Agricultural goods, too, are at risk. While tariffs may shield American producers, they could also backfire. “This could be a double-edged sword,” says Dr. Mondi, noting that the rising cost of essentials—already a sore point for low-income Americans—may worsen.

There’s also concern about broader regional implications. “Lesotho, Kenya, and Tanzania—countries that depend on the US for aid and trade—are heavily impacted,” Dr. Mondi adds. With AGOA (African Growth and Opportunity Act) now effectively sidelined, many fear its benefits “just sit as a piece of paper.”

South Africa’s Trade Minister, Ebrahim Patel, has hinted at seeking bilateral negotiations to exclude certain goods from the tariffs. But until then, volatility looms large.

“This may be an opportunity for Africa,” concludes Dr. Mondi, referencing the AU’s 2063 development vision. “We must focus inward, increase intra-African trade, and build the pan-African economy we envision.”

Yet, as Dr. Mondi warns, the immediate future may bring “bloodbaths—job losses, high costs of living, and hardship.” As global protectionism rises, Africa must choose resilience over dependence.

Listen to the full interview on The Daily Round-Up with Moulana Junaid Kharsany and Dr Lumkile Mondi here