The US recently increased tariffs on imports from China by 10%, taking the cumulative tariffs imposed in just about a month to 20%.
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China retaliated with a 10% tariff on sorghum, soya beans, pork, beef, seafood, fruit vegetables and dairy products, and a 15% tariff on chicken, wheat, maize and cotton.
The General Administration of Customs of China also suspended the export authorisation of three US soya bean producers to export soya beans to China, and suspended all imports of US logs, citing the detection of pests.
Other sanctions, not agriculture related, were also introduced.
It was still uncertain how the new tariffs and resulting so-called trade war between the US and China would affect South Africa.
However, Makube told Farmer’s Weekly that China was a major buyer of commodities, and that higher tariffs could therefore have an impact on international commodity prices, especially those of pork, soya bean and maize, by forcing the US to look for more lucrative markets for these commodities.
He added that the trade war could present export opportunities for South Africa to China if it was not short-lived.
“China announced that the tariffs cannot be waived or exempted under current regulations, but I think it could be overturned quickly depending on negotiation results. Politics are so volatile. An enemy today may be a friend tomorrow.”
Possible opportunities
Louw said that some market shifts had taken place since the 2018/19 tariff war, resulting in China and the US being less dependent on one another for trade.
Despite this, however, the US remained highly dependent on the Chinese market to buy certain agricultural products, of which pork was probably of the biggest interest to South Africa.
“It is difficult to say how the tariff war will impact South Africa as various other factors are at play. Shortfalls may create new export opportunities for South Africa, but it is uncertain if we would be able to take advantage of these opportunities.
“On the other hand, the higher tariffs from China may result in increased pressure on South Africa to remove tariffs on pork, and in effect impact negotiations over South Africa’s future in the African Growth and Opportunity Act agreement.”
She said that economic growth in the US had been under pressure since the start of the year, with the current tariff exchange adding pressure on the economy. This was reflected in a slowdown in retail and employment data in the US, as well as the strengthening of the rand against the dollar.
“Over the next two to four months, the strengthening of the rand against the dollar may bring relief on the input cost side, as the prices of most of our inputs are dollar based,” she said.
