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South Africa: SMEs warned to brace for Trump tariffs, rising costs

South Africa: SMEs warned to brace for Trump tariffs, rising costs

Zawya5 days ago
South African SMEs face growing pressure amid rising geopolitical tensions and economic uncertainty, with TymeBank warning that new US tariffs could significantly impact local exporters from August.
In its July 2025 SME Outlook, the bank's group executive for business banking, Miguel da Silva, says President Donald Trump's 30% blanket tariff on South African imports, effective 1 August, will disproportionately hurt small businesses in key export sectors like agriculture, mining, and automotive manufacturing.
'This is bad news for many South African SMEs who currently export to the United States,' says da Silva. He warns that the move could result in job losses and shrinking revenues unless businesses urgently seek alternative export markets.
President Cyril Ramaphosa has echoed this sentiment, calling for greater resilience in global supply chains and urging exporters to diversify.
Some SMEs have already pivoted to African markets through the African Continental Free Trade Area (AfCFTA), while others are exploring opportunities in the BRICS+ bloc. China's decision to eliminate all tariffs on imports from African countries is a key development in this regard.
The tariff threat comes as South African SMEs face a broader margin squeeze from electricity hikes and rising petrol prices. However, lower inflation forecasts—now expected to stay below 4% in 2025 may provide some relief.
Economic growth remains modest, with Q2 GDP data due on 25 July expected to show only a slight uptick from the previous quarter.
The upcoming interest rate decision by the South African Reserve Bank (SARB), scheduled for 31 July, is also being closely watched. While most analysts expect rates to remain unchanged, some anticipate a possible 25-basis-point cut, something TymeBank hopes will happen to stimulate consumer spending and SME demand.
On a more positive note, da Silva says access to SME funding is likely to improve, thanks to expected partnerships between government, financial institutions, and fintechs. However, smaller businesses with limited track records may still struggle to access meaningful support.
'The next few months will be crucial. SMEs will need to adapt quickly to remain competitive in a shifting global and local environment,' da Silva concludes.
All rights reserved. © 2022. Bizcommunity.com Provided by SyndiGate Media Inc. (Syndigate.info).
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