There’s no need for South Africa’s ICT sector to panic in the wake of US president Donald Trump’s newly-imposed tariffs, with several experts saying the broader impact will be minimal – especially for computing and electronics.
Trump imposed 30% tariffs on most South African exports to the US overnight, exempting precious metals.
His move came two days ahead of the expected 9 July deadline, marking the end of a 90-day ceasefire on duties. Trump also warned on his social media platform Truth Social that “any country aligning themselves with the anti-American policies of BRICS will be charged an additional 10% tariff. There will be no exceptions.”
South Africa exports key precious metals to the US used in PC component manufacturing. With demand for data centres growing, platinum – critical to cooling, chips and power infrastructure – remains an important export.
IDC South Africa MD Mark Walker says the US has protected its local industry by exempting metals and minerals. “That will only protect companies that manufacture semiconductor and printed circuit board hardware in the US,” he says, adding the US is not limited to sourcing only from South Africa.
Business leadership consultant Guy Whitcroft, who has held several leadership positions at computing companies, notes SA has between 70% and 80% of global platinum reserves. Yet, the country is not big enough to push back at Trump’s tariffs by raising export duties, which would draw more ire from Trump, he says.
“We don’t have the muscle that China has, so for us to add export tariffs wouldn’t make any sense,” Whitcroft says. “On the platinum side, there’s room to set a price if we wanted to; not a tariff, just a market adjustment based on our global dominance. I'm not sure what we can do about that. I don't think we can do anything much.”
Limited local capacity
Donald MacKay, CEO of XA Global Trade Advisors, adds it is unlikely South Africa would block platinum group metal exports to the US.
Beneficiation strategies, such as producing catalytic converters locally, could help offset tariff impacts and support job creation, Whitcroft says. However, he adds, any potential to manufacture tech components locally is limited due to power failures, as well as a lack of automation.
The Institute of Information Technology Professionals South Africa (IITPSA) has warned that reciprocal tariffs could hurt the local tech sector. At the end of April, Kudzayi Chipidza, chairman of the IITPSA’s social and ethics committee, said most US tech imports currently carry a 0% tariff, aside from computer monitors and TVs, which are taxed at 25%.
Chipidza cautioned that any change could increase hardware and software costs, particularly for SMEs. “Rising costs may stifle innovation, delay digital adoption and widen the digital divide – particularly for SMEs and under-resourced communities.”
From a trade policy perspective, Whitcroft urges government to engage seriously with Washington. “If we don’t, we risk losing what was our biggest trading partner in terms of trade surplus.”
Reunert CEO Alan Dickson has said the company’s US exports – including radars and circuit breakers – are suffering margin pressure, although volumes remain stable. “The second issue that has a direct impact on us is we export about R300 million to R400 million per year to the US… At the moment, we are suffering because those tariffs need to be paid,” he said at the beginning of last month, when tariffs were 10%.
Old Mutual chief economist Johann Els says the overall economic impact will be limited. “Less than 8% of our exports go to the US, and tariffs exclude precious metals, which make up a significant chunk. So, it’s not an all-fall-down scenario. It’s mainly citrus, wine and vehicle exports that are affected.”
Els adds that a deal could still be struck before the 1 August deadline. “It’s important not to panic… Even if tariffs do kick in, they won’t cripple the economy.”
Econometrix chief economist Dr Azar Jammine concurs, calling the obsession with tariffs disproportionate to structural issues in South Africa, such as high unemployment. “This whole American tariff story is tiny in comparison to the broader scheme of things. Don't panic. There are far bigger problems that we face than that.”
Continuing diplomatic efforts
Meanwhile, president Cyril Ramaphosa has noted the correspondence from Trump on the unilateral imposition of a 30% trade tariff against South Africa.
In a statement, the Presidency says South Africa will continue with its diplomatic efforts towards a more balanced and mutually-beneficial trade relationship with the US.
“We welcome the commitment by the US government that the 30% tariff is subject to modification at the back of the conclusion of our negotiations with the United States,” says the Presidency.
Ramaphosa urges government trade negotiations teams and South African companies to accelerate their diversification efforts in order to promote better resilience in both global supply chains and the South African economy.
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