(Bloomberg) — Walk down the aisles of a Trader Joe\u2019s or Whole Foods Market in the US, and chances are many of the piles of oranges, lemons, limes and grapefruit will be labeled \u201cProduce of South Africa.\u201d<\/p>\n
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They have become a staple in the US \u2014 the world\u2019s largest citrus importer \u2014 especially during the off-season summer months when in the southern hemisphere the South African winter harvest is at its peak. But now, those supplies are threatened by a potential 31% tariff President Donald Trump has slapped on the country. After earlier saying the levies would be imposed on July 9, US officials on Monday signaled that trading partners have until Aug. 1 before the tariffs kick in.<\/p>\n
The looming levy has cast a cloud over the sunny valleys of Citrusdal, a tiny, serene farming town nestled amid rolling green hillocks in the Western Cape area of South Africa. Tucked into the base of the Cederberg mountains about 100 miles north of Cape Town, the area is dominated by citrus farms, giving the town its name. For a quarter century, the juicy produce of the area\u2019s orchards \u2014 owned over generations by people mostly of Afrikaner heritage \u2014 has journeyed thousands of miles to make it to the fruit bowls of American homes.<\/p>\n
But this season is different. Now, Trump\u2019s tariff policies are threatening the very same White farmers to whom he offered asylum, falsely claiming that they are targets of a genocide and that their land is being seized by the state. The levies are likely to have a debilitating impact on their operations, the livelihoods of the thousands of people they employ and the country\u2019s 35 billion-rand ($2 billion) citrus industry \u2014 one of the rare bright spots in South Africa\u2019s stagnant economy.<\/p>\n
\u201cOur business is built for the US market, and for about 25 years we\u2019ve planted, we\u2019ve picked, we\u2019ve planned accordingly,\u201d said Gerrit van der Merwe, the chief executive officer of family owned ALG Estates, as he stood in his 2,500-acre farm donning a gray puffer jacket, jeans and a pair of Veldskoen \u2014 leather footwear made famous by Afrikaner farmers.<\/p>\n
South Africa is the world\u2019s second-largest exporter of citrus fruits, behind Spain. Trump\u2019s tariffs are now threatening to price farmers in the Western Cape \u2014 the country\u2019s prime area for the produce \u2014 out of a key market, leaving them to navigate an uncertain future.<\/p>\n
Citrus growers have been preparing for a new reality. Over recent weeks, some orchards have been in a panicked rush to get their produce to the US market ahead of the looming deadline. Van der Merwe\u2019s farm, whose packing season began May 1, has been working on getting as much fruit as possible on vessels and shipped, he said.<\/p>\n
But longer term, the damages could be more devastating and may push farmers to shrink orchards that are specifically developed to meet demand in the US, said Van der Merwe, whose farms employ 2,000 people and have been managed by his family for eight generations.<\/p>\n
\u201cWe\u2019ve built our supply chains, we\u2019ve built our supermarkets, we\u2019ve built our importing companies on that side, so we\u2019ve been trying to own that market to make sure that we are very, very efficient, and that we can send the maximum fruit into that market,\u201d he said. \u201cFor us, we\u2019ve become dependent on the US market, but also the US consumers have also become dependent on our fruit.\u201d<\/p>\n
The US is the second-largest destination for South African exports after China, accounting for more than $20 billion last year. Major exports include precious stones and metals, organic chemicals and edible fruit. Although the nation sends just 5% to 6% of its citrus produce to the US, the exports had been expected to rise about 7.7% to 7 million cartons this season, and the industry had ambitious plans to grow that share.<\/p>\n
The US duties will be the latest blow to the industry that employs about 140,000 people at the farm level. A rare South African export success, it has been threatened by the crumbling domestic infrastructure at state-owned rail and ports operator Transnet SOC Ltd., that has been blamed for delays and dwindling shipments of key commodities.<\/p>\n
Should the higher tariff \u201ctake effect, it would make our citrus completely uncompetitive in the US market,\u201d said Boitshoko Ntshabele, CEO of the Citrus Growers\u2019 Association. The CGA estimates that logistical inefficiencies already cost the sector 5.3 billion rand a year.<\/p>\n
South Africa is among countries slapped with the steepest tariffs, placing it at an immediate disadvantage while competing with its citrus producing South American rivals, like Peru and Chile.<\/p>\n
To mitigate the impacts of the tariffs, growers may opt to reroute their fruit to other markets, including Europe, but that could undermine the stability in those markets and have \u201ca knock-on effect on the entire Southern African citrus industry,\u201d Ntshabele warned.<\/p>\n
The sector is \u201clooking to add about 100 million export cartons by 2032, and therefore continuously working on diversifying exports markets,\u201d he said. \u201cThis will remain our focus in the near term.\u201d<\/p>\n
Europe is already among the biggest citrus export markets for South Africa. The industry is also locked in a long-running dispute over the European Union\u2019s regulations, which mandated stringent cold-treatment measures and additional inspections of South African citrus following cases of fruits affected by the false codling moth. The moth lays eggs on the surface of the fruit, and the larvae that emerge from the eggs burrow into the rind, develop brown discoloration and render the fruit moldy and unmarketable. The CGA says EU regulations cost the industry about 3.7 billion rand each season.<\/p>\n
As farmers look to widen their export markets, they could turn to China and other Asian countries, said Paul Makube, a senior agricultural economist at First National Bank. China\u2019s recent announcement of a plan to grant 53 African nations tariff-free access presents an opportunity for citrus farmers to expand there.<\/p>\n
\u201cIt has become increasingly important to start diversifying, and with the Asian markets with their big populations and income growth in China, India, they need to start opening up those Asian markets,\u201d Makube said.<\/p>\n
That said, growing the industry\u2019s presence in the world\u2019s top market for the fruits remains critical. South African President Cyril Ramaphosa sought to reset strained relations with the US during an Oval Office meeting with Trump in Washington in May. South Africa is asking the US to drop its reciprocal tariff to the 10% baseline.<\/p>\n
\u201cWe believe that if we have a live conversation going, we will be excluded from the 30%, maybe sitting with the 10%,\u201d said Agriculture Minister John Steenhuisen. \u201cThat still allows us to compete against some of our competitors, particularly in the South American market.\u201d<\/p>\n
On Monday, Trump said he\u2019s planning to announce trade deals and deliver tariff warnings. Meanwhile, gathered in Brazil, BRICS nations \u2014 which includes South Africa \u2014 expressed \u201cserious concerns\u201d over the unilateral levies.<\/p>\n
With no indications the tariff situation will improve, Van der Merwe is worried.<\/p>\n
\u201cI think 10% is manageable; it\u2019s not ideal,\u201d said the ALG Estates chief. \u201cFor now, we\u2019re asking to be handled the same as Peru and Chile \u2014 our competition. Otherwise, we can\u2019t compete.\u201d<\/p>\n
–With assistance from Jennifer Zabasajja, Andre-Pierre Du Plessis and Naomi Kresge.<\/p>\n
(Updates with Aug. 1 deadline, Trump comments and statement from BRICS.)<\/p>\n
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\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Walk down the aisles of a Trader Joe\u2019s or Whole Foods Market in the US, and…\n","protected":false},"author":3,"featured_media":46809,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[36290,3638,64,36288,36287,69,79,36284,36286,36291,36289,67,132,68,36285],"class_list":{"0":"post-46808","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-afrikaner-farmers","9":"tag-bloomberg","10":"tag-business","11":"tag-citrus-fruits","12":"tag-citrus-industry","13":"tag-donald-trump","14":"tag-economy","15":"tag-south-african","16":"tag-south-african-president","17":"tag-south-american","18":"tag-tariff-policies","19":"tag-united-states","20":"tag-unitedstates","21":"tag-us","22":"tag-whole-foods-market"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114813744435402878","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/46808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=46808"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/46808\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/46809"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=46808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=46808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=46808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}