The newly released Absa AgriTrends report, compiled by some of the bank’s top agricultural economists, shows that global markets are entering a period of heightened uncertainty.
The United States (US), under President Donald Trump, has introduced sweeping trade measures, including a 10% universal tariff on all imports and additional “reciprocal” tariffs against countries with which it runs large trade deficits.
Some tariffs have been adjusted, while others remain unchanged, leaving only a handful of countries with secured trade agreements. The report highlights that these developments have increased uncertainty globally, particularly around inflation and trade flows.
Global growth outlook
Despite these tensions, the report notes that the global economy is showing resilience. The International Monetary Fund revised its 2025 growth forecast to 3.0%, and to 3.1% for 2026, up from earlier projections of 2.8% and 3.0%.
However, this remains below the 3.3% growth achieved in 2024, reflecting the dampening impact of trade uncertainty. Absa AgriTrends warns that a new equilibrium in global trade may take time to establish, which could prolong uncertainty for exporters worldwide.
The report also examines key international markets. China’s growth is projected at 4.8% in 2025, driven by exports and fiscal support, though domestic demand faces challenges from a fragile property market and policy uncertainty.
European Union growth remains modest at 1.0%, constrained by weak household consumption outside Ireland. India continues to post strong growth of 6.4%, boosting demand for imported agricultural products, including fruit.
South Africa faces new trade pressures
South Africa’s economic outlook is particularly vulnerable. According to the AgriTrends report, the US is the country’s second-largest trading partner, with exports of USD14.9 billion in 2024.
The new tariffs remove benefits previously granted under the African Growth and Opportunity Act (AGOA) agreement and impose a 30% duty on most goods, precious metals excluded. This represents a significant competitiveness shock.
As a result, the import-weighted tariff on South African exports to the US will rise from 0.7% under AGOA to 14.2%.
Exports to the US are concentrated in a few sectors. Precious metals and stones account for 57% of exports, automotive goods 15% and iron, steel and aluminium over 6%. Even though not significant, smaller sectors such as agriculture (including citrus and wine), are highly dependent on the US market.
The report clearly highlights that some products may be redirected to alternative markets, but seasonal limits and substitution constraints could reduce flexibility.
Government response and economic risks
AgriTrends furthermore outlines the South African government’s five-pillar response strategy: continued engagement with the US to lower tariffs, diversification of export markets, economic support for vulnerable businesses and workers, protection against dumping and import surges, and other demand-side measures.
The report notes that export diversification is likely to take time, and other interventions may not fully offset losses from reduced US market access.
The macroeconomic impact is significant. The report estimates that a 20% decline in US-bound exports could reduce GDP by around 0.4%, assuming other factors remain constant.
The US market accounts for roughly 4% of South Africa’s agricultural export earnings. The report highlights strong growth in the first half of 2025, with shipments to the US up 19% in Q1 and 26% in Q2, driven by robust fruit harvests, efficient port operations and temporary tariff suspensions. Citrus, grapes, apples, pears, nuts, juices and wine were key contributors.
However, the 30% tariff increase threatens producer profitability. Absa AgriTrends notes that producers may need to lower prices in the US to remain competitive, redirect surplus volumes to alternative markets at lower returns, and face downward price pressure in those markets. The report emphasises that maintaining access to the US market and efficient export logistics is crucial for sustained growth.
Domestic consumer trends
The report also examines local economic conditions. Household consumption has remained resilient, with real disposable income rising for five consecutive quarters. However, affordability pressures persist, particularly for lower-income groups, reflected in a sharply negative consumer confidence index of -10 in Q2 2025.
Food inflation, recorded at 5.1% in June, exceeds overall consumer inflation, driven largely by rising meat prices. Absa AgriTrends warns that these pressures will directly affect agricultural consumption and performance.
