Trump tariffs implemented in same week SA citrus growers pack for US export

US President Donald Trump’s tariffs will come into effect on April 9, the same week South African citrus growers pack the first citrus for export to the US. Citrus growers are now calling on the government to prioritise immediate negotiations with the US on tariff reductions or exemptions on citrus.

The Citrus Growers’ Association of Southern Africa (CGA) says this is urgently needed to avoid job and revenue losses in the citrus industry, which is South Africa’s largest agricultural export industry. South Africa is the second-biggest citrus exporter in the world.

“Increased tariffs will hurt South African citrus farms and the rural communities they support. While South Africa only exports about 5% to 6% of our citrus to the US, many rural communities in the Western and Northern Cape heavily depend on US exports.

“A prime example of this is Citrusdal, where exports to the US form the economic heart of this vibrant town. The severity and immediate nature of the impending tariffs could mean that towns like Citrusdal now face either increased unemployment or maybe even total economic collapse. There is immense anxiety in our communities,” Gerrit van der Merwe, chairperson of the CGA and a citrus grower in the Olifants River Valley, says.

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31% tariff will make SA citrus uncompetitive in US

He says 35 000 jobs are connected to SA-US citrus exports in one way or another. In 2024, citrus exports from South Africa to the US amounted to approximately R1.8 billion.

He warns that the additional 31% tariff will make South African citrus uncompetitive in the US market, especially since only the baseline US tariff of 10% will be levied on South Africa’s citrus competitors, mostly in South America.

The 30% tariff will add an additional $4.25 (R82) per carton to the price of SA citrus in the US.

Boitshoko Ntshabele, CEO of the CGA, says there are clear and convincing arguments for why our government must act swiftly and decisively to safeguard citrus.

“Citrus is not produced in a factory. South African citrus growers do not compete with US citrus growers. In fact, it is quite the opposite.

“Our high-quality produce sustains consumer interest when US local citrus is out of season, eventually benefitting US growers when we hand over at the end of our season.

“Citrus also plays an important role in the healthy diet of Americans. Tariffs on seasonal fresh produce will most likely increase prices for the American consumer.”

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SA citrus should be on White House’s exemption list

Van der Merwe believes citrus should be on the White House’s exemption list.

“It is seasonal, and it supports both US health and the US citrus industry while it helps to keep food inflation down.”

The US demand for South Africa’s quality citrus is clearly shown by the increase in exports to the US since 2017. The amount of citrus exported to the US almost doubled since then, to over 6.5 million cartons.

According to Van der Merwe it is also estimated that 20 000 jobs up and down the supply chain in the US are linked to the US/SA citrus trade.

Although only citrus from the Western and Northern Cape are exported to the US due to outdated phytosanitary (plant health) rules, extreme urgency is needed to address the situation because when the tariffs come into effect, large amounts of the citrus destined for the US will be redirected to other markets.

This could destabilise these markets, with a knock-on effect on the entire Southern African citrus industry.

“The US volumes cannot be easily absorbed elsewhere at such short notice,” Ntshabele warns.

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Already steep tariffs on exports to India and China

“We already face very steep tariffs with exports to promising markets like India and China. We appreciate government’s announcement that it will intensify efforts to diversify export destinations, targeting Asia, Europe and the Middle East, but we need to retain current markets as well, as our citrus production is projected to increase substantially in the next few years.”

Ntshabele points out that increases in exports to the US were one of the cornerstones of the CGA’s target to create 100,000 additional jobs by 2032.

“We are now looking at a potential situation where we will not only face job losses, but we also lose the potential of serious job growth, which is a double tragedy.

“Government should urgently work towards a new trade agreement with the US, but such agreements can take years, and we do not currently have the time. The 2025 season has already arrived, and the produce is making its way to the ports.”

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Can SA citrus growers absorb portion of 31% tariff?

Dr Marlene Louw, senior economist at Absa AgriBusiness, says South African citrus producers and other participants in the citrus export value chain may need to absorb a portion of the 31% reciprocal tariffs if American consumers cannot stomach hefty price increases in the coming months.

“With other notable Southern Hemisphere exporters like Chile already sending the bulk of their orange exports (75% or more) to the US during this period, there is limited capacity from other Southern Hemisphere producers to substitute South African volumes, which become uncompetitive based on the imposed 30% import levy.

“Given the limited capacity for alternative sourcing, we expect the biggest portion of the duty increases to be passed on to the US consumer. However, whether consumers have the capacity and willingness to absorb the full tariff increase remains uncertain.

“It seems likely that exports from other geographies and competition from other fruit types will trigger changes in consumption patterns and that some portion of the duty impact would need to be absorbed by other participants in the citrus value chain.”

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US administration should consider food availability in US

She believes a specific consideration that could affect further announcements out of the US is the impact of tariffs on food availability and/or affordability in the US.

In contrast to oranges, South African mandarins supplied into the US from June to October face competition from Peru and Chile. While Chile has limited capacity to fill a gap left by the possible absence of South African volumes facing a 30% tariff, Peru sends only 50% of its mandarins into the US.

“Given a more competitive duty (a 10% Liberation Day tariff for Peru), Peruvian volumes could be diverted from destinations such as the EU into the US market.

Late mandarin exports from Peru are also likely to benefit from strong expansion in the mandarin area up to 2020, which should now be reaching full production. This could add to alternative volumes sourced due to the 30% levy on South African produce.”

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Upcoming season will show if US consumers will tolerate higher prices for citrus

Louw says that given the different features of these product categories, the upcoming season will provide valuable lessons on US consumers’ ability to absorb higher prices for perishable products and the ability of value chains to divert volumes to alternative jurisdictions.

“Recent developments around US imposed tariffs and the response by global trading partners suggest that controlled trade based on the rules governed by the World Trade Organisation is disappearing.

“To navigate this, value chain players and industry stakeholders must enhance their understanding of the law, economics and science that are in play when trade agreements are considered.

“This will likely increase the transaction costs of trading globally but is an imperative to remaining efficient and agile amidst higher uncertainty.”