30% tariff for South Africa citrus in the US

This week the first citrus intended for the US market was packed by South African growers. On Wednesday, April 9 th , a 30% tariff on South African exports to the US was expected to take effect. The Trump administration last week announced what was widely dubbed ‘Liberation day’ – a series of tariffs targeting almost all US trade partners, starting with a baseline tariff of 10%, with higher percentages for many, depending on the trade balance between each country and the US. These tariffs can hurt South African citrus farms and the rural communities that depend on them. The Citrus Growers' Association of Southern Africa (CGA) has called on the South African government to prioritise immediate negotiations with the US for tariff reductions or exemptions on citrus exports. A 30% tariff will render South African citrus uncompetitive in the US market, especially since only the baseline US tariff of 10% would be levied on South Africa's citrus competitors, Peru and Chile, who are situated in South America. For South African citrus, the 30% tariff would add an additional $4.25 per carton in the US market.

Western Cape mainly affected

Gerrit van der Merwe, the Chairperson of the CGA and a citrus grower in the Olifants River Valley, noted that while South Africa only exports about 5% to 6% of its citruses to the US, many rural communities in the Western and Northern Cape are heavily dependent on US exports. A prime example is Citrusdal, where US exports form the economic heart of the vibrant town. The tariffs could mean that towns like it can face either increased unemployment or maybe even total economic collapse. A total of 35,000 jobs are connected to SA-US citrus exports in one way or another. The CGA met with the South African government and implored them to act urgently, as SA citrus growers do not compete with US citrus growers. According to Gerrit high-quality citrus sustains consumer interest when US local citrus is out of season, eventually benefitting US growers when South Africa fills the gap of the off-season.

Shipments to the US have doubled since 2017

US demand for SA's quality citrus is clearly shown by the increase in exports to the US since 2017. The amount of citrus exported to the US has almost doubled since then, to 6,5 million cartons. CGA estimates that 20,000 jobs up and down the supply chain in the US are linked to USSA citrus trade. Although only citrus from the Western and Northern Cape are exported to the US because of outdated phytosanitary (plant health) rules, extreme urgency is needed to address the situation. Trump administration has given a 90-day reprieve, with the 10% baseline tariff in effect. This should incentivise all role-players. South Africa must expedite negotiations with the US to ensure continuity with this market.

For more information on the impact of Trump tariffs with produce you can write here.