This has been a crazy and challenging week for anyone involved in international trade. Economists have been quick to trash the crass calculations that have been used by the US to justify the tariffs that they have forced on the rest of the world. But this was a task made too easy by the incompetence and/or irreverence of the US government trade wonks. What is more difficult and much more important to fathom, is the likely impact of Trump’s tariff trickery and the expected counterattack by the main trading partners of the US, on world trade.
Serious trade economists are undoubtedly hard at work scratching their heads and cranking their models. But at this early stage in Trump’s game, the range of scenarios is so wide, and the scale of the shock is so large, that even the best economic models are likely to roll over and play dead 1. At this early stage, it is still important to think through the many ways in which producers and consumers in South Africa may be impacted by the rapidly changing trade environment, under different policy and economic assumptions.
To make this thought experiment manageable, practical and useful – this note focuses on just two products: soya beans and oranges. Both are agricultural products in which South Africa and the USA have significant interests, with the US a major net exporter of soya beans, and South Africa a large net exporter of oranges.
The state of trade2
The US is the world’s second largest exporter of soya beans (after Brazil), accounting for 30% of world soya bean exports in 2023. South Africa has recently emerged as a serious competitor in the world soya bean market – ranked as the ninth largest exporter globally in 2023 – though exporting just over 1% of what the US exported in this year. Historically, around half of the US’s soya beans have been exported to China, followed by Mexico and the EU. Together, these three markets absorbed around 70% of all US soya bean exports last year. In 2023, the three largest importers of soya beans from South Africa were Bangladesh, Malaysia and Mozambique3.
In 2023, South Africa was the world’s third largest exporter of oranges, after Spain and Egypt, with the US following narrowly behind in 4th place. About a third of South Africa’s exports go to the EU, followed by the UAE, Russia, the USA and China. Whereas the US accounts for just 6% of South Africa’s orange exports, South Africa is the second largest exporter of oranges to the USA (after Chile), accounting for 20% of US imports of oranges in 2024. The largest export markets for oranges from the USA are South Korea, Canada, Japan and Mexico.
Tariffs, tariffs and more tariffs…
Let’s start with oranges. The most recent round of tariff hikes – introduced unilaterally by the USA on 2 April 2025 – included the following additional duties on the US’s five main sources of oranges:
- Chile – 10%
- South Africa – 30%
- Mexico (agriculture exempted from initial tariff imposed on Mexico and Canada…for now)
- Morocco – 10%
- Australia – 10%
Trump’s team has also raised tariffs on soya beans, but the US is a large net exporter of soya beans and so duties on its imports are unlikely to have a material impact on world trade.
On the other hand, soya beans are likely to be an immediate target for reciprocal tariffs, and the Chinese have already raised tariffs of 34% on all US imports, including soya beans, adding to the retaliatory tariff of 20% introduced in March this year. It is anticipated that the EU will soon follow suit – and imports of soya beans from the US can expect a reciprocal tariff of around 20% in the EU market.
Canada has introduced tariffs on imports of selected products from the US, including a 25% duty on oranges and soya sauce, but not (yet) on soya beans4. Mexico has indicated that it will not pursue “tit-for-tat tariffs” on the United States for now5.
Possible scenarios; likely implications
Most of us are not too fussed about where our oranges come from as long as they are sufficiently tasty and well-priced. Disregarding differences in colour, quality and packaging – a significant increase in the price of our favourite navel or valencia is likely to make us (or our local retailer) look elsewhere. Our chickens – the main consumers of processed soya beans – do not give a cluck about where their next meal comes from and are therefore even more price sensitive.
Starting with soya, we would not expect that a tariff on imports into the US would harm consumers in Trump land, as they already benefit from a glut of beans. However, we would expect an effective 54% duty on exports to China to have severe implications for soya bean producers. With US farmers effectively locked-out of their main export market, prices for soya bean future contracts on the Chicago Board of Trade fell by 6% only a few days after Trumps’ announcement6. As rightly noted by the American Soybean Association: “Tariffs are not fun”7.
Conversely, prices and production in Latin America are expected to strengthen as Chinese buyers seek out new sources of duty-free beans – by 3 April, soya beans in Brazil were already trading US$1 higher per bushel than in the USA8. In China, the price of soya beans is expected to escalate sharply over the next few months, once existing stocks dry up 9.
For South Africa, this creates an immediate opportunity to grow and diversify soya bean exports into the void left by the US in the massive Chinese market. But the global shake-up in the soya value chain also poses multiple second and third round risks.
Firstly, US producers are already scanning for new export destinations: “Farmers’ fates rely on creating new market access opportunities”10. Despite the fact that South Africa was a small net exporter of soya beans in 2024, we did also import US$22 million of beans from the USA. At certain times or for specific users, imports from the US are able to compete against domestic producers in the local market. If US$ 13 billion of US soya bean exports are diverted from China by prohibitively high import tariffs, South Africa and multiple other smaller countries could find themselves swimming in soya.
Secondly, soya bean feed is a critical driver of competitiveness in the poultry industry, explaining up to 70% of production costs11. If the price of soya beans is held artificially low in the US market, poultry producers could face a short-term boon in feed prices. South Africa is already battling to contain cheap imports of chicken products from the USA, with anti-dumping duties extended for another five years in April 2024 at R9.40 per kg12. Further adjustments may be needed simply to maintain the status quo.
Finally, untapped demand and higher prices in China will bring many new entrants into soya bean production and may also serve to shift more South African farmers out of maize and other crops and into soya. The longer-term implications for the structure of domestic and global food production are impossible to predict.
When it comes to oranges, the endgame is a little clearer.
In the first instance, South Africa’s orange producers are going to have to find a new market for around 6% of our orange exports. We simply won’t be able to compete against the other main suppliers to the US who now enjoy a 20% to 30% preference over our navels. The fact that US orange exports will experience tariffs in some third countries – such as Canada – may open the door for South African exporters. But to access these opportunities will be no mean feat given the complex food health requirements that generally come with fruit exports; as evidenced by our past difficulties in getting our citrus into the EU 13. Other Southern Hemisphere suppliers that have been stung in the US – such as Chile – will also be hunting for alternative markets.
There is little risk that US orange exports will pose a significant threat to the domestic industry. Partly because the harvest seasons are different, and partly because they would have to compete against imports from Spain, which enter the country at a 4% duty preference thanks to the EU-SADC Economic Partnership Agreement. Over the last 20 years South Africa has recorded no imports of oranges from the USA. Similarly, there is minimal risk that South African farmers will be threatened, on our own turf, by imports from elsewhere in the world.
So what can we do?
We are still in the early stages of an impending trade war. As a small player in the world economy, we have little to gain from joining the fracas. South Africa accounts for just 0.4% of US imports and 0.3% of their global exports. What we do next is of little concern to Trump. On the other hand, South Africa has already been caught in the crossfire, and we must do all that is within our policy powers to ensure that our exporters and consumers are adequately cushioned. The two products considered in this note suggest that multiple but well-targeted actions may be needed.
To start, the South African Government needs to reach out to producers that are likely to be most impacted by Trump’s tariffs (such as citrus and automobile exporters) to ensure that all parties are united in their response and fully informed of the likely consequences. Regular engagements and information sharing will enable Government and business to navigate these torrents better together.
The Government should review its existing export marketing and trade promotion support programmes to ensure that they are geared to support affected producers in identifying and selling into new markets. In the agricultural sector, this will require a massive effort to clean-up our animal and plant health management services and speed-up our testing and certification system.
South Africa should also look to deepen its trade relations, including the scope and ambition of existing agreements, with its main trading partners. This should involve a renewed effort to resolve the multiple non-tariff barriers that impede our trade with Europe and the rest of the continent. We should also push hard to improve access for South African agricultural products in China, India and other fast growing developing markets.
We should strongly resist fighting fire with fluff. Despite the pain caused by Trump’s tariff tantrum, widescale retaliation from South Africa will do little or nothing to reverse his actions. At best, it will raise costs for consumers, including South African producers that depend on inputs from the USA; at worst it will attract further and unwanted attention from the US (anti) Trade Representative.
Moreover, very little of the revenue gained from any new tariffs imposed by South Africa would go towards funding the large hole in our own government budget. Instead, because of the strange structure of the Southern African Customs Union (SACU) revenue sharing arrangement, most of this windfall would flow to Botswana, Lesotho, Namibia and Eswatini. Perhaps fair reparation for what Trump has done to some of our regional partners, but no panacea for a 0.5% VAT increase in South Africa.
In advance of a future unknown, we should greatly enhance our monitoring of trade flows from the US and elsewhere and look-out for short-term spikes in import volumes or sharp dips in prices that may do severe and lasting damage to South African producers. ITAC needs to be equipped to undertake real time analysis of trade trends and policy developments; and must be ready to take appropriate and speedy action when the cause is clear and unfair harm is evident.
Finally, South Africa should continue to push hard for multilateral solutions and global solidarity through its leadership role in the G20 and its influence at the WTO. This position has already been well articulated by the Minister of Trade, Industry and Competition, Parks Tau:
“We are advocating for a reform of the World Trade Organization and ensuring that it is able to adapt to (the) current reality but also ensuring that we are able to reinforce a multilateral system of trade and transparency across borders. It must be that nations meet and arrive at a common set of rules and work based on that common set of rules. That is why the World Trade Organization-related system is so important.” 14
References
1 We and many others are working on this so watch this space…
2 All trade data used in this note has been sourced from ITC Trade Map
3 South Africa’s soya production and exports were significantly lower in 2024 and have therefore not be used as a ‘benchmark’ in this analysis.
4 https://www.pm.gc.ca/en/news/news-releases/2025/04/03/canada-announces-new-countermeasures-response-tariffs-from-united-states
5 https://www.reuters.com/world/americas/mexico-will-not-enter-tariff-tit-for-tat-with-us-president-says-2025-04-02/
7 https://soygrowers.com/news-releases/tariffs-are-not-fun-farmers-are-frustrated/
8 https://www.straitstimes.com/asia/east-asia/china-retaliation-on-us-farm-goods-hits-soybeans-bolstering-brazil
9 https://www.farmprogress.com/marketing/chinas-soybean-meal-prices-surge-as-us-trade-tensions-escalate
10 https://soygrowers.com/news-releases/in-wake-of-fresh-tariffs-asa-urges-administration-to-quickly-negotiate-with-countries-facing-higher-tariffs-including-china-phase-2/
11 https://www.namc.co.za/the-ripple-effect-of-maize-and-soybean-price-fluctuations-on-poultry-production-and-market-prices-of-poultry-meat/
12 https://www.moneyweb.co.za/news/south-africa/anti-dumping-duties-against-us-chicken-remain-in-place/
13 https://www.namc.co.za/wp-content/uploads/2024/07/A-Case-of-SPS-measures-against-SA-Citrus-exports.pdf
14 https://www.algoafm.co.za/domestic/agoa-essentially-nullified-by-tariffs-says-trade-minister
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