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A potential easing of U.S. import tariffs on food products will be beneficial to consumers and exporting nations.
We welcome the discussion about the U.S. potentially adjusting the tariffs on foodstuffs. This would be beneficial for U.S. consumers and equally helpful to those in the agriculture, food, and beverage industries that export to the U.S.
While the U.S. accounts for only 4% of South Africa’s agricultural, food, and beverage exports, valued at US$13.7 billion, these exports are concentrated in a few key industries, primarily citrus, macadamia nuts, wine, grapes, and ostrich products, among others.
Therefore, any downward adjustments to import tariffs on these products, especially if they were to apply to all suppliers, would be incredibly beneficial.
South Africa, to an extent, was able to export a decent volume of agricultural, food, and beverage products to the U.S. during the 90-day pause.
Thus, if one considers our agricultural exports to the U.S. in the second quarter, they jumped 26% year-on-year to US$161 million.
It was an ability to utilise the tariff pause period. However, the agricultural products are seasonal, and some, such as table grapes, will only enter the export season in a few weeks, and will be unable to benefit from the tariff pause of the past few months.
They face a tariff of 30%, which will weigh on their competitiveness relative to our competitors in Chile, Peru, and others.
Thus, a proposal by Kevin Hassett, chair of the National Economic Council, to discuss lowering import tariffs is a welcome development.
Still, there is no firm commitment, but mainly comments from the economic leaders of the U.S. administration.
Therefore, we will have to watch and see if such revisions occur or if there are any useful developments in this direction.
Importantly, one hopes they can be applied universally so that we all benefit as exporters, and most importantly, for the U.S. consumer to have a variety of high-quality and affordable product choices from suppliers.
Here is what Hasset said in the Financial Times this morning.
--Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa.
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