South Africa’s Tech Startups are Being Affected by the 30% Tariff Even Though They Don’t Export Much to U.S

South Africa’s tech startups are being affected by the 30% tariff that the U.S. has started charging on some goods from South Africa. This tariff jump, from 10% to 30%, has made South Africa one of the countries most hurt by the new U.S. trade rules. Even though South Africa’s tech startups don’t export a lot to the U.S., the effects of this tariff are still being felt around the tech industry.

The new 30% tariff mostly hits physical products. South Africa usually sends metals, minerals, cars, and farm products to the U.S., not many tech products. Most South Africa’s tech startups focus on software, cloud services, or other digital products, which don’t get taxed by the tariffs because they are not physically shipped. So, in this way, South Africa’s tech startups are being affected by the U.S 30% tariff more indirectly than directly.

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But for some South African tech startups that do export hardware or electronics to the U.S., the tariff is a big problem. The tax makes their products much more expensive in the U.S., so it is harder to compete with companies from countries like Mexico or China that don’t face as high tariffs. These startups now have to rethink how they do business. They might have to cut costs, raise prices, find new suppliers, or look for buyers in different countries.

Alan Dickson, who is the CEO of Reunert, a company working in electrical engineering and technology, said that the tariff has a small effect on their software and electronics parts that don’t export to the U.S. But their electrical arm, CBi-electric, which sends circuit breakers to the U.S., is really feeling the impact. When the tariff was 10%, they already made some changes like adjusting prices and costs. Now at 30%, they are still trying to figure out the long-term effect. They are working on ways to reduce costs, maybe raise prices, and improve delivery to keep their customers happy.

The U.S. government said that goods shipped before August 8 and processed before October 5 will keep the old 10% tariff. But everything else now faces the new 30% charge. For many tech startups, this is only a short relief and doesn’t stop the bigger problem.

South Africa’s government is trying hard to fix this. The U.S. is the country’s second-biggest buyer after China, so losing good trade terms hurts. At the end of July, South Africa sent a last-minute trade proposal to ask for relief. But so far, the U.S. hasn’t replied, and the tariffs have gone ahead anyway.

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To help businesses, the South African government is making a support plan for those hurt by these tariffs. The Department of Trade, Industry and Competition has set up an Export Support Desk. This desk will help companies understand what’s happening, give advice on new markets, explain rules, and connect businesses with South African embassies around the world. This support is important, not just for tech startups, but also for big industries like cars, farming, citrus fruits, and wine, where many jobs could be at risk.

South Africa’s tech startups are being affected by the U.S 30% tariff in different ways. Some are directly hit because they sell physical tech products to the U.S., and it’s now harder to compete. Others feel the impact more as uncertainty and changes in trade make it tough to plan ahead. This tariff also affects South Africa’s overall image as a good place for business. For now, everyone, business leaders, government workers, and startup founders, is hoping for a deal that can ease these challenges for South Africa’s tech startups and the country’s economy.

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