Tanzania urges South African exporters to consider trade shift amid US tariff risks

TANZANIA – As South Africa faces the threat of 30% tariffs on its exports to the United States, Tanzania has stepped forward with a proposal that could soften the blow for local businesses.

Speaking during a trade and investment meeting hosted by the Johannesburg Chamber of Commerce and Industry on Thursday, Conrad Kisanga of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) urged South African exporters to look north.

Kisanga pointed to Tanzania as a practical option for manufacturers seeking continued access to the US market under better conditions.

“If you go, you will be taxed 30%,” he said, referring to direct exports from South Africa. “But in Tanzania, if you want to export to America, it’s 10%.”

That 10% rate currently applies under baseline tariff rules for qualifying African Growth and Opportunity Act (AGOA) countries.

However, a temporary pause on the “Liberation Day” tariffs imposed on South Africa will expire in mid-June. Should diplomatic efforts by President Cyril Ramaphosa and his delegation in Washington fail to secure relief, a new wave of US duties could disrupt trade, particularly in agriculture.

Kisanga drew comparisons between Tanzania’s current opportunity and what Vietnam experienced during Donald Trump’s first term in office.

When Washington imposed sweeping tariffs on Chinese goods, manufacturers and exporters began moving operations to Vietnam to avoid the higher rates.

This shift helped Vietnam boost its trade volume with the US, although it later faced its own set of tariffs due to suspicions of trade rerouting.

“Vietnam stepped in when China faced pressure,” Kisanga explained. “Tanzania can do the same for South Africa.”

While trade rerouting has sparked concerns globally, the broader point Kisanga made was about maintaining competitiveness. He highlighted the importance of exploring friendly trade environments in the region.

Reforms building confidence

Under President Samia Suluhu Hassan, who took over from the late John Magufuli in March 2021, Tanzania has introduced a range of reforms to improve the business climate.

While the World Bank’s 2019 Ease of Doing Business report had placed the country at 141 out of 190 economies, recent surveys suggest a turnaround.

The Stanbic Bank Africa Trade Barometer for 2024 shows growing business confidence, especially in trade infrastructure and access to credit. These improvements reflect the government’s push to reduce red tape and improve investor relations.

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