Trump Tariffs Cast Shadow Over Sa's Soybean Exports

South Africas rapidly expanding soybean industry faces significant uncertainty as President Donald Trumps new tariff regime, paused for 90 days on April 9, threatens to disrupt established trade flows and global agricultural markets.

Under the recently announced US policy, local agricultural products will be subject to tariffs ranging from 10 to 30 when entering the American market.

This marks a sharp departure from the previous era of duty-free access under the African Growth and Opportunity Act Agoa, which helped boost South African exports, including soybeans, to the US.

While the exact tariff rates for specific soybean products remain unclear, the baseline levy of 10 is expected to apply to all imports, with the possibility of higher rates depending on further US policy announcements.

Recent developments come amid a broader return to protectionist trade measures, reminiscent of the 2018 trade war between the US and China, which triggered global market volatility and forced major agricultural exporters to seek new markets.

Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, warns that these tariffs could have far-reaching consequences for South African agriculture.

Not only could they make South African soybeans less competitive in the US market, but they may also spark a wave of retaliatory measures and trade diversions globally.

In the previous round of tariffs, China responded by shifting its soybean purchases from the US to South America, causing major disruptions in global grain and oilseed prices.

If similar dynamics play out, South African soybean exporters could face increased competition in third markets as US producers seek alternative destinations for their crops.

This could lead to price volatility and potential oversupply in markets where South Africa has recently established a foothold.