The South African Reserve Bank (SARB) has warned that the ongoing US tariffs on local exports will eat away at already low growth and cost thousands of jobs. Image: Business Day.
(The Post News)– The South African Reserve Bank warns of job losses and slower growth due to US tariffs and AGOA’s end, but a new trade deal with China brings hope for the fruit industry.
The central bank noted in its Monetary Policy Review this week that it expects South Africa’s economy to grow moderately in 2025 and 2026 but will not breach above 1.5%.
According to Business Day, the second half of 2025 has been hit by weak fixed investment and the implementation of the Trump administration’s tariffs, meaning the economy is unlikely to grow by more than 1.2% in GDP growth.
US Tariffs and AGOA Exit
The tariffs, announced by President Donald Trump in April 2025, are part of a broader protectionist strategy aimed at shielding American industries.
South Africa was hit with a 30% levy, one of the highest in sub-Saharan Africa, affecting key sectors such as automotive manufacturing, agriculture, and textiles. While critical minerals were exempted, the impact on other exports has been severe.
The Reserve Bank’s Monetary Policy Review emphasized the urgency of structural reforms to boost productivity and diversify export markets. “Efforts should also focus on strengthening existing trade partnerships, including full implementation of the African Continental Free Trade Area agreement,” the report stated.
Minister of Trade Parks Tau and Minister of International Relations Ronald Lamola have been actively seeking alternative markets to offset the loss of US access. However, the transition is expected to be slow and painful, especially for industries that have long relied on AGOA’s preferential treatment.
China Steps In to Support South African Farmers
Amid the economic uncertainty, South Africa’s fruit industry has received a much-needed boost from China.
After months of anxiety among citrus and stone fruit producers, particularly in the Western Cape, China signed a landmark trade agreement granting South Africa access to its market for five varieties of stone fruits: apricots, peaches, nectarines, plums, and prunes.
The deal was finalized in Shanghai by Agriculture Minister John Steenhuisen and China’s Minister of Customs Sun Meijun. It marks the first time a single country has been granted access to China’s market for such a wide range of stone fruits.
Industry representatives from Hortgro, the Fresh Produce Exporters’ Forum, and BerriesZA were present to celebrate the agreement.
Thabile Nkunjana, senior agricultural economist at the National Agricultural Marketing Council, noted that the deal could be transformative. “There was panic after the US tariffs were announced, especially among citrus growers. This agreement with China is a lifeline,” he said.
The Chinese market offers vast potential for South African produce, especially as demand for high-quality fruit continues to rise. Moreover, the agreement is expected to stabilize prices, protect jobs, and encourage further investment in the agricultural sector.
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