Neither the American government, to which some exporters in industries including citrus have submitted trade proposals, nor the South African government is giving any clear indication whether a favourable trade agreement will be signed before 1 August.
Industry bodies in the citrus, wine, and table grape sectors have told African Farming the economic impact will be “terrible”.
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Impact on grapes
Christo Conradie, South Africa Wine’s manager of stakeholder engagement and policy, stated that the increased import tariff has profound implications for the sustainability of the wine industry’s exports to the United States and causes tension across the entire value chain.
He states that the American market is of vital importance to the South African wine industry – approximately R660 million worth of wine is exported to the United States each year.
Implementing a 30% import tariff will likely result in a substantial decline in export volumes, as South African wine will become less competitive in an already fiercely competitive market.
This loss will have far-reaching consequences, ranging from reduced income for producers and exporters to downsizing operations and potential unemployment, particularly in rural areas where wine production is a vital source of employment.
According to the South African Table Grape Industry (SATI), this industry is also deeply concerned about the 30% increase in import tariffs, as the United States is an important, emerging market for South African table grapes that has developed over two decades of reliable off-season supply.
The 30% tariff, however, will make South African table grapes uncompetitive in the American market. This could be worsened if a lower tariff is imposed on Southern Hemisphere competitors, such as Peru and Chile.
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