Trump’s tariffs to disrupt global trade

Experts warn of rising costs, supply chain chaos, and economic fallout.

President Donald Trump announced plans to impose a minimum 10% tariff on all US imports, with even higher duties targeting key trading partners. This move is already disrupting supply chains, causing delays and congestion reminiscent of those seen during the Covid-19 pandemic.

Trump imposed a 30% levy on goods imported from South Africa. 

ADVERTISEMENT CONTINUE READING BELOW

Read: Trump tariffs: SA gets hit with a 30% reciprocal duty

“The 10% kicks in soon and then the country levy kicks in in a week’s time. In terms of global supply chains, a lot of people have been forward buying already in advance of this and front ordering. The American buyers who have the cash have tried to order upfront, and so it has been causing some supply chain congestion,” says Agricultural Business Chamber (AgBiz) fruit desk manager Wolfe Braude. 

The base tariffs go into effect on 5 April and the higher reciprocal rates on 9 April. 

Braude noted that the entire global supply chain will need to be reworked as countries find alternative export markets. 

“This will cause enormous confusion, and it will probably interfere with the shipping rates as well because the logistics business is very fine tuned. It might result in some exporters having challenges getting bookings [and] delays to exports. It might be a bit like the Covid-19 congestion,” says Braude. 

Read: Trump targets Lesotho with highest tariff in the world

Dr Ernst van Biljon, programme coordinator in supply chain management at the IMM Graduate School, says this announcement creates a landscape of heightened uncertainty and increased costs for global supply chains. 

Companies operating across borders will face the prospect of significantly higher tariffs, forcing them to reassess their sourcing strategies, production locations, and pricing models. 

“This could lead to a fragmentation of supply chains, as businesses seek to diversify their operations to mitigate the impact of the tariffs. South Africa finds itself in a particularly precarious position as it faces a substantial competitive disadvantage,” says Van Biljon.  

“This could severely impact key export sectors, such as agriculture, manufacturing and automotive, potentially leading to job losses and economic slowdown”. 

Read:
Volkswagen plans price hikes following Trump’s auto tariffs
Adidas, Puma plunge as Trump’s tariffs shock shoe supply chains

Braude noted that SA’s agricultural sector does not have high exposure to the US; in total, it is only about 4%, including grains, wine, nuts, and fruit. 

Citrus exports to the US account for only about 9%, while grapes make up just 2%, as most of SA’s fruit categories are not heavily exposed to the US. However, there are exceptions – such as macadamia nuts, with a quarter of their supply sold to the US market.

“You can’t really do much when tariffs are this high. If it was 10% you could probably absorb some of that. The 30% will translate to a price jump of about 20% and it is difficult to absorb that,” says Braude. 

Confusing calculations

ADVERTISEMENT: CONTINUE READING BELOW

There have been questions about how the tariffs were calculated because Trump said little about the methodology. 

Braude explained that the calculation considered two variables: the deficit the US has with a particular country and the volume of goods sold into the US. 

Then he just cut it in half.

“They also used some non-traditional variables, possibly the Vat rate. There is some methodology in terms of trade policy and calculations for translating non tariff barriers into a tariff percentage. But at the moment we don’t have clarity as to how they built it and how they got to the 60%.” 

Read: US excludes steel, aluminium, gold from reciprocal tariffs

In his fact sheet, Trump justified his tariff for SA by saying that the country imposed animal health restrictions that are not scientifically justified on US pork products, permitting a very limited list of US pork exports to enter South Africa.

“South Africa also heavily restricts US poultry exports through high tariffs, anti-dumping duties, and unjustified animal health restrictions. These barriers have contributed to a 78% decline in US poultry exports to South Africa, from $89 million in 2019 to $19 million [in] 2024,” says Trump. 

Keep your friends close

Van Biljon noted that the discrepancy between the tariffs imposed on South Africa and those levied on countries like Brazil, which enjoys a 10% rate, raises questions about the rationale behind these decisions. 

“This could lead to trade diversion, where US importers shift their sourcing away from South Africa towards countries with lower tariffs,” says Van Biljon

Countries such as Australia, Brazil, and Egypt all received 10% tariffs, while Canada and Mexico were excluded because they are embroiled in a separate on-and-off tariff dispute with the US. 

“There were some countries that didn’t get harsh tariffs, he made exceptions for his allies. Which basically means they were given the standard tariff rate that applies to the whole world. Their methodology is very subjective. We don’t know the exact economics behind it. It’s possible that it was influenced by political decision making, says Braude.

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.