US President Donald Trump’s 30% tariff on exports from South Africa to the US were supposedly effective from 1 August 2025. I say supposedly because depending on who you talk to, listen to or read, the date of implementation varies. There is even uncertainty if they will be implemented at all but I don’t think we can count on that. We do know though that it has been clearly spelt out by President Trump that if a country does not support the US policies it will put pressure on the diplomatic and economic relationship between the countries.
However, the tariff list contains some notable exceptions. Minerals considered critical to the US – notably platinum group metals (PGMs), gold, chrome and coal – will attract 0% tariffs. That accounts for about half of what South Africa exports to the US, so excluding these commodities is a major relief. Fortunately, South Africa is not a big exporter of copper in world terms as a 50% tariff is being imposed on copper. South Africa exported 12 631 tons of copper as compared to 1.1 million tons mined (4th in the world) in the US, which represents just over half of the US’s consumption.
No doubt that there are going to be tough times for some industries and companies going forward. A headline revealing that automation company Jendamark is set to lose R750 million in orders because of tariffs encouraged me to investigate other companies that export to the US and yes tariffs are going to be challenging especially as one MD said: “In his perception our political leadership has done absolutely nothing in terms of negotiating with the US and are now blaming unlike other countries and the European Union. Our company manufactures capital equipment for metal beneficiation. We regard ourselves as a high-tech manufacturing company that prides itself in designing customised machinery and all we do is deliver and assemble. We do not do any machining or cutting. Our sophisticated supply chain (20 000 to 40 000 parts per machine) that we have set up, deliver. It takes one year to manufacture a single machine. Cost wise we have been highly competitive over the years but what Europe has negotiated brings them into our price bracket. All these suppliers could now also suffer. Our orders in the US are now on hold because of the envisaged higher price – the equipment is not made in the US – but all is not doom and gloom. Enquiries from Canada are now evident.”
Another MD gave an even more enlightening perspective. “Eighty per cent of the product that we export to the US is imported. There is possibly going to be price pressure on us in the future and we will have to investigate ways of becoming even more productive and reduce costs so we can pass on the savings. China does make our product but we currently have the 5 per cent advantage over them in terms of tariffs.”
“But our clients are accepting the tariff increases as setting up a factory in the US is not feasible they say. Labour rates are just too high. A basic worker will earn 18/20 dollars an hour. I saw McDonalds advertising 22 dollars an hour. Across the board employee movement is fluent as skilled workers are in short supply and there is significant demand. Renting of factory facilities is high and very hard to find and new builds are exorbitant. Raw materials like copper, steel and aluminium are all going to have tariffs applied to the imports as the US is not self-sufficient. This is all going to add to the costs.”
“So no we will not be setting up a factory in the US especially if you look at the cost of living there. A beer could cost you between 8 and 10 dollars and a Big Mac 12 dollars. For four of us it cost 200 dollars for a beer and a sandwich before a round of golf at a very ordinary course, which cost us 50 dollars each.”
“In the end I think the tariffs are going to hurt the US more as the rest of the world has taken note of this supply chain shake up.”
Bruce Crawford
