US Raises Tariffs on Some South African Exports
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South African exporters to the United States are facing higher tariffs following changes that took effect on 24 July 2026. While the increase is relatively modest, from 10% to 12.5%, the reason behind it marks an important shift in US trade policy. Rather than being driven by traditional trade disputes, the new tariff is linked to the United States' assessment of whether countries effectively prohibit the importation of goods produced with forced labour. For South African exporters, this means future tariff reductions may depend as much on regulatory reforms as on trade negotiations.
Why the Tariff Changed
The new tariff follows the expiry of the temporary 10% tariff imposed under Section 122 of the Trade Act of 1974, which automatically lapsed on 24 July 2026 after reaching its statutory 150-day limit.
At the same time, a new tariff regime introduced under Section 301 of the Trade Act of 1974 came into effect. The action followed an investigation by the Office of the United States Trade Representative (USTR) into whether trading partners prohibit and effectively enforce restrictions on goods produced with forced labour. The final determination was signed on 23 July 2026 and became effective immediately.
Why South Africa Faces a 12.5% Tariff
Under the new framework, countries are grouped according to whether they impose and effectively enforce prohibitions on goods produced with forced labour. The USTR determined that South Africa falls within the category of economies that do not currently meet this standard. As a result, most South African exports to the United States are now subject to a 12.5% Section 301 tariff, while countries that meet the required standard generally face a 10% tariff.
Although the increase from 10% to 12.5% is unwelcome, it is considerably lower than the 30% tariff South Africa faced under the now-invalid International Emergency Economic Powers Act (IEEPA) tariff regime introduced in 2025.
It is also important to note that the 12.5% Section 301 tariff is an additional duty. Unless a product-specific exemption applies, it is generally imposed on top of the normal Most Favoured Nation (MFN) customs duty applicable to the imported goods.
Some Products Are Exempt
Not all South African exports are affected by the new tariffs.
The Department of Trade, Industry and Competition (DTIC) confirmed that several products of export interest to South Africa are exempt from the new Section 301 tariffs. These include:
platinum-group and precious metals;
critical minerals;
pharmaceuticals;
civil aircraft and aircraft components;
macadamia nuts;
oranges and limes;
tea, spices and seeds;
cane sugar;
orange and lime juice;
syrups; and
certain chemical products covered by the exemption schedule.
South Africa also requested exemptions for products including wine, seafood and catamarans, but these were not included among the exemptions announced following the USTR decision.
Importantly, the exemptions apply to specific Harmonized Tariff Schedule (HTS) codes, not broad product categories. For example, a business exporting "citrus products" cannot assume all of its exports qualify simply because oranges and limes are listed. Exporters should verify the HTS classification of each product against the official Federal Register annexes before assuming an exemption applies.
South Africa Plans Further Action
The South African government has indicated that it will continue engaging with the USTR in an effort to reduce or eliminate the tariff.
More significantly, the DTIC has announced that it intends publishing draft regulations prohibiting goods produced wholly or partly through forced labour or child labour for public comment.
These proposed regulations could strengthen South Africa's case for qualifying for the lower tariff category if they are implemented and effectively enforced.
AGOA Remains the Bigger Concern
While the new tariff has received considerable attention, exporters should not overlook a much larger issue.
The African Growth and Opportunity Act (AGOA) has only been reauthorised until 31 December 2026. Although South African exporters continue to benefit from duty-free access for thousands of products, there is currently no certainty about what will happen after the programme expires at the end of the year.
For many exporters, particularly those in the agricultural and manufacturing sectors, the future of AGOA may have a greater long-term impact than the current 2.5 percentage point tariff increase.
Practical Considerations for Exporters
Businesses exporting to the United States should review their pricing, contracts and customs documentation to understand the impact of the new measures. In particular, exporters should:
confirm the correct HTS classification for each exported product;
verify whether any product-specific exemptions apply;
review Incoterms® and sales agreements to determine which party ultimately bears the cost of the additional US tariffs; and
monitor the publication of South Africa's proposed forced labour regulations, as these may influence future tariff treatment.
Why This Matters
The latest US tariff changes demonstrate that international trade policy is increasingly influenced by labour, environmental and governance standards rather than traditional trade considerations alone.
For accountants and business advisers, this highlights the growing importance of understanding how international regulatory developments affect clients' pricing, export competitiveness and contractual arrangements. It also reinforces the need for businesses to monitor global compliance requirements as part of their broader risk management strategy.
