Rooibos council says the industry is cushioned against the impact of Washington’s 30% tariff on imports thanks to its broad global customer base, yet it has joined the government in calling for urgent relief to safeguard the sector’s long-term growth.
Rooibos sustains about 8,000 jobs, mostly in rural Western Cape communities where it is exclusively grown, according to the SA Rooibos Council (SARC). Though the US accounts for only 5% of rooibos exports, it is seen as a high-potential market which supports that country’s blending and packaging industries. SARC said a prolonged tariff burden could weaken the industry’s margins, erode competitiveness against rival herbal teas and ultimately dampen investment and rural employment at home.
While the impact of increased tariffs remains unclear, the SARC said there is no immediate threat to investment or employment because the industry’s diversified export markets provide resilience against potential shocks.
“We are engaging with stakeholders and exploring all opportunities to ensure rooibos remains competitive in the US market, while also strengthening our presence in other international markets,” said SARC chairperson Dawie de Villiers.
“Our priority is to ensure the product remains competitive in the US while expanding opportunities elsewhere.”
SARC argues that rooibos is unique to SA and poses no threat to US farmers.
“It poses no competitive threat to American agricultural production or domestic manufacturing. In fact, more than 90% of Rooibos exported to the US is shipped in bulk for blending, packaging and marketing by American companies, which supports value addition, stimulates local business activity and creates jobs within the US market.”
Earlier this year, US president Donald Trump imposed a 30% tariff on all SA exports to the US, which took effect earlier in August, as part of a broader trade strategy targeting countries with which the world’s largest economy has significant trade deficits and those aligned with Brics.
After unsuccessful talks, the department of trade, industry & competition confirmed SA was pursuing negotiations with Washington while rolling out support measures locally. These include the launch of a so-called export support desk to guide companies to alternative markets, financial packages to help firms absorb tariff costs and a planned block exemption allowing exporters to co-ordinate activities without breaching competition laws.
On Monday, agriculture minister John Steenhuisen said SA agricultural exports to the US jumped 26% year on year in the second quarter to $161m, led by fruit, nuts and wine, but warned the new tariff could undermine that momentum.
“Resolving the tariff talks with the US is a top priority,” he said, stressing that the sector must also accelerate diversification to new markets in Asia, the Middle East and elsewhere in Africa to reduce vulnerability,” he said.
“The recent imposition of a 30% tariff on our exports by the US has brought to light the urgent need to diversify our export markets — and enhance our competitiveness to mitigate the economic impact of losing preferential trade access.”
Though the full financial impact of the tariff is still being modelled, the rooibos council has acknowledged that exporters will face pressure on revenues. Still, with strong demand from Europe and Asia, the council believes the sector is better positioned than many others to absorb the shock, provided diplomatic talks deliver relief.
The SARC’s immediate focus is on engaging with government authorities to address the issue, though they are considering involving their US partners more formally in the future to strengthen collective advocacy efforts.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.