By Samina Jaffery*
The United States has moved from a low-tariff baseline to a much tougher trade stance in 2025. South African exporters—long beneficiaries of the African Growth and Opportunity Act (AGOA)—now face some of the steepest duty increases since the 1990s.
On 2 April 2025, Washington introduced a 10 % across-the-board duty on all imports. By August, it layered on country-specific surcharges and industry-level hikes that now define the new normal for global suppliers.
The headline rates:
Together, these measures mean many South African shipments now carry tariff exposure before logistics and compliance costs.
The ripple effects across industries
• Automotive: A 25% levy threatens roughly $2 billion in annual US car parts exports, already pressuring the Rosslyn and East London assembly hubs.
• Agriculture: A 31% tariff on citrus adds about $4.50 per carton, squeezing margins and risking 30 000+ rural jobs.
• Metals: Section 232 tariffs of 50% on steel, aluminium, and derivatives have erased much of the sector’s export competitiveness.
• SMEs: Export orders to the U.S. have dropped by nearly half since April 2025, as smaller firms re-price or pause contracts.
• Macro impact: Treasury modelling suggests a 0.2-point drag on South African GDP for 2025, even after rand adjustments.
The Mauritius alternative—lawful, efficient, and regionally strategic
Re-engineering supply chains through Mauritius offers a compliant way to preserve margins and diversify markets while avoiding tariff evasion risks.
1. Freeport platform
- Duty-free / VAT-free storage and re-export zones.
- Modern logistics, bonded warehousing, and light-processing rights.
- 100 % foreign ownership and fast customs clearance.
2. Tax advantage
- 3% corporate income tax for companies exporting goods (including international buy-sell).
- No capital-gains tax and 0 % withholding tax on dividends.
- 80 % partial exemption regime for qualifying foreign-source income.
3. Treaty network and reputation
- Over 45 double-tax agreements—including one with South Africa.
- Robust OECD-aligned compliance and substance requirements, ensuring legitimacy with investors and regulators.
How South African firms can pivot—without crossing the line
CFO checklist — turning strategy into action
1. Quantify exposure: Recalculate landed costs under the 10 %, 25%, 30%, and 50% tariffs by HTS code.
2. Segment markets: Separate US-bound sales from alternative-market volumes.
3. Design structure: Establish a Mauritius trading or Freeport entity; confirm eligibility for the 3 % rate.
4. Build substance: Appoint local directors, maintain an office, and keep operational staff on island.
5. Review tax & customs: Align transfer-pricing, treaty positions, and export documentation with current OECD and SADC standards.
6. Monitor policy: Track AGOA renewal and US Section 232 updates monthly.
The takeaway
South Africa’s trade calculus has changed dramatically. The tariff wave of 2025 has turned US market access from a privilege into a premium.
By contrast, Mauritius—with its Freeport efficiencies, 3% export tax rate, and stable
regulatory climate—offers regional traders a way to re-balance portfolios, defend
profitability, and stay globally compliant.
*Samina Jaffery is the Managing Director of Brent Consulta, based in Mauritius.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
Angelique Anderson joins our Pretoria office as an Administrative Assistant, bringing over 24 years of experience across the financial, legal, and executive support sectors, both locally and internationally. Her meticulous attention to detail, discretion, and extensive knowledge of asset finance and compliance make her an invaluable addition to our team.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
Michelle joined the Brenthurst Wealth Team in 2025 as a paraplanner assisting Iniel Van Zyl and Leslie Greyling in our Fourways office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
