By AgriSA CEO Johann Kotze

South Africa's agricultural sector is facing one of its most significant trade shocks in years, as new tariffs in the United States place fresh pressure on exporters in the Western Cape. But instead of despair, industry leaders are framing the challenge as an opportunity to reboot.

Speaking during a Nedbank-hosted panel discussion at NAMPO Cape, agricultural organisation leaders, research experts and global trade specialists described the 30% US tariff on South African produce as a 'wake-up call' – one that has forced the sector to confront long-standing vulnerabilities and accelerate efforts to diversify into new markets.

A sector built on exports

The tariff has been widely described as a serious threat, and few regions illustrate the risks of export dependency more starkly than the Western Cape, where exports account for around half of all farm income. 

With its Mediterranean climate, the Western Cape is 1 of only 5 regions globally uniquely suited to producing deciduous fruits such as apples, pears, and grapes, said Louw Pienaar, senior research analyst at the Bureau for Food and Agricultural Policy (BFAP). 'Apples are the region's single largest industry, followed closely by wine, and many producers rely heavily on the American market.'

This model has brought prosperity, but it has also left farmers exposed. When international markets falter, small towns across the province – many of which depend on farming for survival – feel the pain. 'If farming stops making money, the local economy collapses,' warned AgriSA CEO Johann Kotze. 'It's not just the producers, it's the shops, the suppliers, the whole value chain.'

Why the US still matters

'The US is still the largest consumer market in the world. They eat what we eat, and they understand our products,' said Kotze. 'Take avocados, for example: consumers in the US already eat them. If you want to export them to China, you need to teach those consumers what they are and how to eat them. What's more, our countries are counter-seasonal, which makes the US a natural destination for South African produce.' 

So, it's seasonal, it's aligned, and it's lucrative. Even with tariffs of 30%, the sector will find ways to stay competitive. 'This market is too valuable to walk away from.'

Pienaar added that studies show South African products will remain competitive in the US market, even with the tariff, thanks to their excellent quality.

Rico Basson, CEO of South Africa Wine, agreed. 'For packaged wine, the US is a very important market and, even now, it will remain on our radar as a growth market. In fact, many importers of our products in the US are showing loyalty by finding ways to share the margin pressures, reflecting not only the extraordinary quality of our wines, but also the strength of our long-term trade relationships.'

Despite this, the US tariff on packaged wine, although now only 5% higher than before, translates into a 30% disadvantage compared to competitors such as Chile and Australia. For companies sending up to 60% of their volumes to the US, the impact could be severe.

Some exporters shipped record volumes ahead of the tariff hike to cushion the short-term blow. And everyone agreed: South Africa cannot win on price alone in the bulk wine segment. Competitiveness here will require smarter positioning, branding, and strategic trade diplomacy.

Government and industry alignment

An upside to the crisis has been improved collaboration between industry and government, said Kotze. Negotiation teams from the Department of Trade, Industry and Competition (DTIC) are in daily contact with exporters, exploring tactical trade-offs and identifying priority markets. This collaboration marks a seminal moment in the relationship between industry and government. 'We're seeing focus, urgency and daily problem-solving,' Kotze said.

The African frontier

Nedbank's global trade specialist Shane Naidoo said that South Africa should not allow US policy shifts to dominate its thinking. 'The US must remain part of the trade mix, but diversification is essential, and recent developments have brought focus to long-standing issues.' 

Streamlining logistics, certifications and related processes, particularly in African markets, is now just as urgent as negotiating tariff reductions, he said. Africa is emerging as one of the sector's most promising long-term opportunities. Bespoke trade advisory can support exporters by unlocking insights into new and existing global markets. These services include access to export or import grants that complement business funding structures, enabling growth and diversification while mitigating risk through alignment with key stakeholders in the trade ecosystem.

'Rising urbanisation and a growing middle class across Africa are fuelling demand for quality food and beverages. Regional trade integration under the African Continental Free Trade Area (AfCFTA) could further accelerate this trend. Though infrastructure and regulatory bottlenecks remain hurdles, for many producers, regional expansion is both a growth strategy and a hedge against reliance on distant markets vulnerable to geopolitical shocks,' he said.

Asia-Pacific: A mixed picture

The panel agreed that Asia offers immense potential, but progress will be uneven. Japan, which currently imposes a 15% tariff on South African wine, is a top priority for negotiators, and reducing this duty could deliver an immediate boost to exports.

India, one of South Africa's BRICS partners, presents an even bigger long-term prospect, but tariffs remain punishingly high – tariffs on South African apples, for example, are higher than the 30% recently levied by the US – and regulatory hurdles are complex. Still, the country's rapidly growing consumer base is becoming more exposed to international products, creating a window of opportunity.

A new mindset for trade

The consensus among panellists was clear: the US tariff shock should not be seen as a barrier but as a catalyst for change. It has forced the industry to think strategically. The future lies not in abandoning traditional markets, but in striking a balance between maintaining access to established destinations like the US while steadily building new ones.

Kotze summed it up perfectly: 'If we focus only on the 30% tariff, we miss the 100% opportunity. This crisis reminds us that we can't take markets for granted. We must stay in the US, we must grow in Africa and Asia, and we must keep pushing for better trade conditions.'