Emerging Markets, Mounting Tariffs: Is South Africa Ready for the Next Wave?

“To me, the most beautiful word in the dictionary is tariff,” said the self-proclaimed “Tariff Man,” President Donald Trump. The Tariff Man is on a mission to make America First. On numerous occasions, President Trump has painted the U.S. as a victim of trade injustice which he believes has compromised American companies and robbed the country of a great deal of wealth.

The biggest villain in Trump’s eyes is global manufacturing giant China. Trump has stated his plans to impose tariffs as high as 60% on China. Tariff hikes are essentially a tool used to deter importers from using an out-of-favor exporter. Fellow BRICS nation South Africa may also soon fall out of favor given its political alignment within the bloc, which could see the U.S. come hunting for springboks, taking aim at South Africa's trade benefits under AGOA.

South Africa’s agricultural sector enjoys a significant advantage under the African Growth and Opportunity Act (AGOA), a U.S. trade initiative that provides duty-free access to the American market for eligible African countries. In 2022, South Africa exported ~$737 million worth of agricultural goods to the U.S., while importing ~$263 million in U.S. agricultural products. This resulted in a trade surplus of $474 million in South Africa’s favor, making the U.S. a lucrative market for key products such as fresh fruits, nuts, wine, and processed goods.

It does not look promising that South Africa will continue to enjoy the U.S. market as the U.S. president drew the line on BRICS even before entering office when he stated: "there is no chance that the BRICS will replace the US Dollar in International Trade, and any Country that tries should wave goodbye to America."

As South Africa faces potential exclusion from the African Growth and Opportunity Act (AGOA), the country’s agricultural sector must consider alternative trade routes to mitigate the loss of a nearly $1 billion export market to the U.S. Two key avenues for safeguarding and expanding South Africa’s agricultural trade are: leveraging the African Continental Free Trade Agreement (AfCFTA) and strengthening ties with Asia. Both strategies offer unique opportunities and challenges, demanding a detailed exploration of their economic implications.

The African Continental Free Trade Agreement (AfCFTA) offers South Africa a platform to deepen trade within a continent projected to become the world’s largest free trade area. AfCFTA connects 54 African nations, covering a population of 1.3 billion people with a combined GDP of $3.4 trillion. It is set to eliminate tariffs on 90% of goods traded within the bloc, aiming to boost intra-African trade, which currently accounts for only 17% of total African exports compared to 68% in Europe and 59% in Asia as of 2021. Africa’s population is expected to double by 2050, driving significant demand for food imports. South Africa’s agricultural sector, with its diverse output—ranging from citrus to wine—gives it an edge over less-developed agricultural economies within Africa. Countries such as Kenya, Nigeria, and Ghana are increasingly relying on imported fruits and processed foods, where South Africa has a strong foothold. But the grass is not always green on the other side as South Africa would face competition from countries like Morocco and Egypt, both of which export similar agricultural products, particularly citrus. Additionally, infrastructural gaps in certain parts of Africa may slow the flow of goods to key markets and many African consumers are highly price-sensitive, thus South Africa’s premium offerings like high-quality wine and specialized fruits may make its products less competitive in low-income markets.

There is another option: Asia, which represents a rapidly expanding market for agricultural goods, driven by rising incomes, urbanization, and a growing demand for premium, high-quality produce. Countries in these regions, particularly China and India are increasingly turning to imports to meet their agricultural needs. China is the world’s largest food importer; it is a key market for fresh fruits, nuts, and wine. China accounted for 11% of global agricultural imports in 2023. There is room for South Africa to tap more aggressively into this share. India’s middle class is expected to reach 583 million people by 2025, fueling demand for premium food products, including South African wines and nuts. As part of BRICS, South Africa could leverage its political and trade ties to reduce barriers and increase exports.

While the BRICS partnership may facilitate trade with China and India, tariffs and non-tariff barriers remain significant hurdles. For example, China imposes stringent phytosanitary standards that may limit South Africa’s export growth. South Africa faces competition from established agricultural exporters like Australia, Chile, and New Zealand in these markets. These countries often have existing free trade agreements that South Africa lacks, putting it at a disadvantage.

Both AfCFTA and trade with Asia present viable options for South Africa to future-proof its agricultural trade in the event of AGOA exclusion. The best approach may involve a hybrid strategy: leveraging AfCFTA to solidify its position as a regional agricultural leader while aggressively expanding into Asia to capture high-value markets. By diversifying its trade portfolio and investing in infrastructure and compliance, South Africa can not only weather the loss of AGOA but emerge stronger in a rapidly shifting global trade landscape.

Nothing is set in stone yet. The U.S. has some considerations to make; removing South Africa from AGOA may be a premature or sub-optimal move, as the true benefit of AGOA lies in its potential to create stronger consumer markets for American exports in the long run. With Africa projected to become the world’s largest free trade area under AfCFTA, fostering economic growth and trade partnerships through AGOA positions the U.S. to benefit from a more prosperous and integrated African market in the future.

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- Reuters. "Trump warns BRICS nations against replacing US dollar." Published November 30, 2024.

- African Union. "Acceleration of AfCFTA Implementation." Accessed January 2023.

- Mail & Guardian. "Can South Africa deepen agricultural exports to China?" Published January 27, 2025.

- The Wall Street Journal. "Trump calls tariffs the most beautiful word." Published October 16, 2024.