The Potential Impact of Trump Tariffs on South Africa: A Tale of Two Products

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 trade 2 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 importer