After United States President Donald Trump’s announcement on 2 April that South Africa will receive “reciprocal” tariffs rising to 30% on some of its products, South African exporters, including the wine industry, have been on the edge of their seats to see how it will affect their businesses.
The announcement not only affected South Africa, but countries such as China, Canada, Mexico, Europe and India too.
Following the announcement, Trump referred to the occasion as the US’s “liberation day”, framing the tariff increases as a symbolic break from what he described as unfair import duties imposed on American goods by other countries. The move signalled a shift towards a reciprocal trade policy: if you do it to us we will do it to you.
The tariff hike, among other products, was imposed against wine exports.
According to a press release by SA Wine, “South Africa exports mostly white wine to the US, with sauvignon blanc the most exported variety [and] in 2023 the country saw a 4% value growth in the bottled wines exports to the US.”
The voice of an industry professional
Paarl Post contacted Emile Joubert, a strategic communications consultant in the wine industry at MediaVision, to gain insight into the potential implications for South Africa’s wine sector.
He said although the US represented only 8% of South African wine exports the tariff hike was still “of great concern”. The market presence, image and reputation of South African wines has been growing in the US to the benefit of South Africa’s global wine reputation. To lose that presence will be detrimental to the country’s international wine image as a whole, Joubert said.
“South African wineries exposed to the US are talking to their distributors in that country to ascertain the effects of the increase. This is a great pity as, although America represents only 8% of our wine exports the presence of Cape wines in the US has been growing in terms of awareness among consumers as well as recognition of the astounding quality South African wines offer.”
Joubert observed that American consumers may now turn to wines from Chile, Argentina, the European Union and Australia that are key wine-exporting regions to the United States, and which have been subject to comparatively lower tariff increases.
For the near future South African wines are likely to see a decline in the US market, the world’s most influential wine market, Joubert said.
Brands that succeed there often benefit from a strong international reputation, as being desirable in the US can significantly boost global recognition, he explained.
He added that the American wine media also have a wide international reach, meaning that when one’s wines are featured the coverage resonates worldwide. For this reason it is crucial for South Africa to maintain a presence in the US market.
