US tariffs are bleeding South African companies
Tariffs from the United States are now affecting businesses in South Africa heavily, as the relationship between the two countries remains strained.
In April, as part of his “Liberation Day” announcement, US President Donald Trump hit South Africa with a tariff of 30%.
This was based on a reciprocal tariff after accusing South Africa of hitting US exporters with tariffs of 60%. This is based on the trade imbalance and not actual tariffs, but still remains policy on the US’s part.
Following several delays in implementing the tariffs and extended negotiations, South Africa and the US could not find a compromise, and the nation was hit with a 30% tariff in August.
The tariffs caused widespread economic uncertainty across global financial markets when first announced, with sentiment taking a significant hit.
With the tariffs now in effect, businesses across South Africa are facing worsening pressures.
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined by 1.4 points to 49.5 points in August 2025 and returned to contractionary territory.
For instance, the seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined by 1.4 points to 49.5, returning to contractionary territory, with respondents highlighting the tariffs’ impact.
After a significant and unexpected surge in sales in July, new orders again declined, by 8.5 points to 47.4 in August. Both domestic and global demand remained under pressure.
Respondents noted that tariffs are starting to hurt exports. Even if the respondents themselves were not directly affected, many emphasised the knock-on effects of impacted clients.
A major company that has felt the sting of US tariffs is JSE-listed Bell Equipment, an industrial equipment manufacturer.
Following warnings in June, Bell Equipment this week warned shareholders that it expects earnings and headline earnings to drop by between 22% and 32% to a range between 220 cents and 250 cents per share.
“The expected decrease in earnings is primarily due to a global slowdown in demand in key markets and the impact of the current USA tariff situation on the USA market,” it said.
“The impact of the USA tariffs on this period was not as substantial as initially expected, but it is anticipated that the impact on the second half of the year will be more significant.”
Troubled relationship
The tariffs form just a part of the US’s strained relationship with South Africa, which has reached a boiling point under Trump.
Trump and his administration have claimed that South Africa is in the midst of a white genocide.
Despite high crime rates in the country that affect all races, no substantive evidence proves that white South Africans are facing genocide.
Nevertheless, the US allowed many South Africans to claim refugee status within its borders.
Moreover, in April, Republican Representative Ronny Jackson introduced the US-South Africa Bilateral Relations Review Act of 2025.
The bill would require the administration to determine whether South Africa has undermined US national security or foreign policy interests and comprehensively review the countries’ bilateral relationship.
It would also allow for sanctions of senior government officials, particularly amongst those from the ANC.
According to estimates from the Congressional Budget Office, the new legislation is estimated to cost the United States only R9 million over 10 years.
Regarding immediate contact between parties, officials from the USA have remained hesitant to visit South Africa.
US Secretary of State Marco Rubio refused to come to South Africa over his disdain for the Expropriation Act.
Despite South Africa hosting the G20 conference this year, it remains to be seen if Donald Trump will attend.
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