The trade, industry & competition department made export diversification a main priority of the South African government more than a year ago. The record since then remains thin. Now the accountability question has sharpened, because US trade policy has shifted again and the institutions charged with securing new markets have yet to show they moved with urgency.
The turning point came when the US administration announced its “Liberation Day” tariffs, imposing duties of about 30% on South African businesses in the US market. Those levels have since declined after the US Supreme Court struck down the tariffs the administration imposed under the International Emergency Economic Powers Act. South Africa and several other countries now face tariffs of about 12.5% in the US market for some products. The environment, however, continues to shift. With the loss of African Growth & Opportunity Act benefits, South Africa will face an additional average tariff of 3.4% on top of the existing 12.5% when entering the US market from next year, lifting the effective tariff to about 15.9%.
That figure matters for competitiveness. Some of South Africa’s agricultural competitors in the US market face slightly lower tariffs of 12.5%, meaning the increase will erode the position of South African products. The country will continue to export, just as exports continued in the past under far higher tariffs before the Supreme Court struck them down. But the policy lesson, according to Wandile Sihlobo, is that these events must not be viewed in isolation. They form part of South Africa’s broader need to access a range of export markets, and the trade friction with the US shows that had the department focused on export diversification earlier, the country would now be in a better position to enjoy greater market access in other regions.
The department’s response is central to that assessment. When the US introduced the “Liberation Day” tariffs, the department indicated that it would prioritise diversification. Since then, the major trade development has been the signing of the China-Africa Framework Agreement on Economic Partnership for Shared Prosperity, which came into effect in May. The agreement provides African countries tariff-free access to the Chinese market for a range of goods. A fuller discussion of this reference source can be found at https://www.businessday.co.za/opinion/2026-11-10-wandile-sihlobo-tariff-free-access-to-china-sparks-hope/
The significance for agriculture is considerable. For most of the agricultural products South Africa typically exports and seeks to advance, including various fruits, nuts, raisins, wine and meat, the Chinese market is now available tariff-free for the next two years. China is the world’s second-largest agricultural importer after the US, with average annual imports of $206bn in 2021-25, making it a major buyer of agricultural products.
For South African exporters, the Chinese market has long been on the radar precisely because of this global significance. But tariffs of 12%-20% on several agricultural products have hampered the competitiveness of South African exports. Before this new tariff-free arrangement, South Africa accounted for a mere 0.4% share of China’s agricultural imports, which have averaged about $206bn over the past five years. The hope now is that this share will increase notably.
There are, however, limits to what the agreement delivers, and these carry governance implications. China is not as easy to access as some believe: phytosanitary barriers remain for some products, meaning that while tariffs sit at zero, the benefits to the wider agricultural sector remain minimal. Moreover, the framework agreement is not a trade agreement, a distinction that matters when assessing what has actually been negotiated on the country’s behalf.
The deeper institutional obstacle, in Sihlobo’s view, lies within the region itself. What South Africa needs is a courageous step to resolve the Southern African Customs Union’s divisions in its trade approach, divisions that continue to slow the country’s ability to sign trade agreements. Until that internal coordination is addressed, the capacity of the state to convert openings such as the Chinese arrangement into durable market access will remain constrained.
Meanwhile, beyond China, the Middle East and Asia offer a range of markets, a theme Sihlobo examines in detail in his new book, “Balance and Reason: Outlining a Growth Path for South Africa’s agriculture”. Sihlobo is presidential envoy on agriculture and land, chief economist at the Agricultural Business Chamber of South Africa and a senior fellow in Stellenbosch University’s department of agricultural economics. Whether the department and the customs union can act on those openings before the next US tariff shift lands may be the real test of the diversification pledge.