After several deadline extensions, South African fresh produce exporters now face uneconomical tariffs that could devastate citrus exports to the US, potentially destabilising other markets as trade is redirected
South African government sources have said they are continuing talks with the US government to try and address the impact of new 30 per cent tariffs.
After the deadline for the introduction of the tariffs had been extended several times, facing them is now a reality for the country’s fresh produce industry.
The South African government announced this week that President Cyril Ramaphosa and US President Donald Trump have had another telephone conversation and have agreed to continue trade talks.
However, South African foreign minister Ronald Lamola slammed US attempts to interfere with South Africa’s domestic issues. He told AFP this has brought relations between the nations to “a low”.
Sources said that is hardly a good sign – and that it could harden US attitudes.
The South African fresh produce industry will now have to apply their minds to what will happen next.
It has already been stated that the country’s growers will not be able to afford these tariff increases, with exports becoming uneconomical.
Citrus is the most important fresh produce industry in terms of exports to the US.
Growers in the Western and Northern Cape are the only producers allowed to export citrus to the US from South Africa.
During the past two decades they enjoyed duty-free exports because of the African Growth and Opportunity Act (AGOA), and the business has grown to more than 100,000 tonnes annually.
In recent years, stonefruit and grape exporters have also identified the US market as a major area of growth.
Inside South Africa, participation in the US market for fresh produce has been called “fairly small” with suggestions that the country should focus on other markets.
Industry leaders have, however, warned that such statements are unrealistic, with the business needing all its export markets open to ensure stable growth in what is a rapidly expanding sector.
Citrus growers and exporters in the north of the country have already warned that other markets will become more congested, destabilising returns and leading to more internal competition between growers.
The imposition of the new tariffs has not had any effect on the value of the local currency, giving rise to views in government circles that South Africans should not over-react to the tariffs.
The expected job losses in the industry and other sectors are still yet to emerge – and this will no doubt change attitudes.
