Donald Trump’s ‘solution’ to South Africa avoiding the tariff hike – move production to the US – is nothing more than economic blackmail
On 7 July, United States President Donald Trump delivered an aggressive diplomatic strike against South Africa. In a letter addressed to President Cyril Ramaphosa, Trump announced a 30% blanket tariff on all South African exports to the US, effective 1 August. His justification? That South Africa has maintained a trade surplus with the US, and that its tariff and non-tariff measures constitute an unfair barrier to American goods. Even more provocatively, Trump invoked national security, framing our trade position as a threat to the US economy.
This letter is not just another outburst. It is a calculated attempt to strong-arm a sovereign nation into economic submission. The threat is clear: open your markets to US goods or suffer the consequences. A 30% tariff on South African exports will devastate key industries, particularly agriculture, vehicle manufacturing, mining and wine, all of which rely on the US market. These are not just statistics on a spreadsheet. These are jobs, livelihoods and entire regional economies that hang in the balance.
South Africa’s vehicle sector contributes more than 6% to GDP and supports about 110,000 direct jobs. Vehicles produced here such as Ford Rangers and Mercedes-Benz will become too expensive to compete. Citrus and wine exports are equally exposed, with the US being one of our top three export destinations. If the tariff takes effect, these sectors will face losses in billions, and South Africans will bear the brunt through job losses, wage cuts and rising prices.
The rand will probably follow, making imports — especially fuel and food — more expensive. The inflation that follows will erode purchasing power and deepen inequality. South Africa, already struggling with more than 32% unemployment and a debt-to-GDP ratio above 70%, simply does not have the fiscal space to absorb this kind of external shock. Local government will feel the pinch too, as revenue dries up and social demands rise.
But perhaps the most disturbing element of Trump’s letter is his thinly veiled “solution”. He proposes that South African businesses can avoid tariffs by moving production to the US. This is not a trade incentive, it is economic blackmail. It effectively invites companies to abandon their workers, close their factories and set up shop on American soil. Accepting such terms would hollow out our industrial base, undermine our developmental goals and turn South Africa into a glorified exporter of raw materials once again.
The message is clear: surrender your economic sovereignty or be punished.
This moment must not be met with passivity or appeasement. South Africa must respond not just defensively, but strategically. We are not without options. As a key member of the Brics bloc, which now expanded to include strategic partners like Egypt, Argentina and Iran, South Africa has the diplomatic leverage and the market alternatives to push back.
Brics represents more than 45% of the global population and nearly a third of the world’s economic output (by purchasing power parity). The New Development Bank provides access to non-Western capital, while the proposed Brics payment system could help us de-dollarise our trade and reduce exposure to external manipulation.
Our position in the African Continental Free Trade Area (AfCFTA) is even more critical. AfCFTA is not just a trade agreement, it is a blueprint for African industrial integration. South Africa must accelerate its shift toward intra-African trade. We should be selling vehicle parts to Nigeria, agri-processed goods to Kenya and technology components to Rwanda rather than relying on an unstable US market. This will require infrastructure investment, streamlined border logistics, and harmonised trade regulations all of which are within reach, if treated with urgency.
Yet no external alliance will matter if we do not fix our own structural weaknesses. This crisis should trigger a wholesale rethinking of South Africa’s industrial and trade policy. For too long, our economy has remained dependent on commodity exports and fragile global value chains. We need to invest in value-added manufacturing, local beneficiation of minerals and targeted support for high-potential sectors such as pharmaceuticals, renewable energy and agro-processing.
Government procurement must prioritise local production. Tax incentives should reward domestic reinvestment. And we must protect strategic industries from hostile takeovers and foreign capture disguised as trade reform.
This is also the moment for South Africa to lead a legal and diplomatic offensive at the World Trade Organisation. Trump’s tariff may well violate global trade rules, particularly the principle of “Most Favoured Nation” treatment. By framing the tariffs as a national security measure, Trump seeks to circumvent multilateral norms. South Africa must challenge this, not only for our own sake but on behalf of the Global South, where similar economic strong-arm tactics may follow.
Ultimately, this is not about Trump. It is about what kind of economy and country South Africa wants to be. Will we remain vulnerable to every geopolitical wind that blows from Washington? Or will we chart a path rooted in resilience, regional solidarity, and industrial strength?
Trump’s letter is a warning, but it is also a gift. It reveals the fragility of our overdependence on Western markets. It exposes the risks of complacency. And it gives us a once in a generation opportunity to reimagine our trade posture, our global alliances, and our economic future.
South Africa must not beg. We must not panic. We must act with clarity, unity and vision.
Nkosinathi Mtshali is a policy analyst, and advocate for transformative justice in South Africa. He writes in his personal capacity.