South Africa’s Business Confidence Rises In July, But 30% Tariffs Could Dampen Growth 

Data from The South African Chamber of Commerce and Industry’s Business Confidence Index shows that business confidence was 116.7 in July, up from 113.2 in June. 

South Africa is retaining its position as a global trade hub, despite rising global economic disruptions. In July, business confidence climbed, as a result of increased vehicle sales, expansion in the manufacturing sector, strong prices for precious metals and sustained inflation. 

Released every two months, data from The South African Chamber of Commerce and Industry’s Business Confidence Index shows that business confidence was 116.7 in July, up from 113.2 in June. Business confidence slumped in June, compared to May’s record of 115.8, before perking up in the seventh month. 

However, the chamber has maintained that despite July’s performance, business confidence is bound to suffer for the rest of the year after the 30% tariff took effect two weeks ago on South Africa’s exports to the US. A statement released by the South African Chamber of Commerce and Industry (SACCI) stated that the newly imposed Trump tariff could have unintended and adverse consequences for the country’s economy and long-term trade relations. 

Johannesburg has been trying to negotiate a lower tariff or an exemption on major industries with Washington for months, although all efforts appear to have failed. The government planned to submit a revised trade deal this week after Trump’s deadline lapsed. South Africa has been hit with the highest tariff rate in sub-Saharan Africa.  

The SACCI has urged the government to increase its efforts to secure better trade agreements with the US, given that trade with the world’s largest economy is necessary for South Africa amid weak economic growth forecasts till 2026. 

Trade Minister Parks Tau said that this new trade deal addresses the issues the US had shed light on in the 2025 National Trade Estimates Report and had been approved by Cabinet. Without divulging too many details, he added that South Africa has also acknowledged some sanitary and phytosanitary concerns from the report. Although Tau did confirm that some of these issues were resolved, as containers of poultry and pork are to be shipped from Washington to South Africa in the next two weeks. 

Agriculture Minister John Steenhuisen described the new offer as ‘broad and generous’ in response to claims that the White House did not find the revised deal to be ‘very ambitious.’ The leader of the second-biggest party in the coalition government said in an interview that the 30% import duty would remain in place, unless the government made drastic changes to its race policies like affirmative action, which has drawn much criticism from Trump. 

In May, Trump attacked South Africa’s President Cyril Ramaphosa with false claims of a ‘white genocide’ and land seizures happening across the country. Ramaphosa was desperate to repair relations with Washington after Trump cancelled much-needed aid to Johannesburg and expelled the country’s ambassador. 

During the same meeting, South Africa offered to purchase LNG from the US, which is its second-biggest trading partner, for a 10-year period to secure a more lucrative trade deal. Officials estimate this would facilitate roughly $900 million to $1.2 billion in trade per annum and $9 billion – $12 billion for 10 years. 

As per the agreement signed in May, South Africa and the US have also pledged to enhance technological cooperation, particularly in fracking, to tap into the country’s gas production potential. The White House has also agreed to import 40,000 duty-free vehicles per year from South Africa, as well as granting duty-free access for South African imported automotive parts to be produced in the US. 

Johannesburg has been importing gas from a pipeline in Mozambique, which faces the threat of depletion.  Gas exploration in the South African region of Karoo has been put on hold due to environmental concerns. Therefore, this LNG deal with Washington is imperative for Ramaphosa’s government to meet the country’s rising oil and gas needs. 

While Trump is determined to push American interests at the cost of other countries’ demands and requirements, South Africa’s business confidence rising last month is certainly an impetus for the government to push further negotiations to protect its national and trade interests.