South Africa’s Central Bank Downplays Economic Impact of U.S. Tariffs

Johannesburg, August 9, 2025 — The South African Reserve Bank (SARB) has assessed that the newly imposed U.S. tariffs will likely have only a modest effect on the country’s economic growth, with little to no impact on inflation, Governor Lesetja Kganyago said on Friday.

Speaking at the central bank’s Annual General Meeting, Kganyago acknowledged concerns over the 30% tariff the United States has levied on South African imports — the highest rate for any Sub-Saharan African country — but emphasized that the broader economic implications remain contained.

“Our preliminary assessment is that these tariffs, alongside other global uncertainties, are causing only modest damage to growth, while leaving inflation broadly unchanged,” Kganyago told shareholders. He added, “This is a setback, but not catastrophic.”

The tariffs were triggered after South Africa missed the deadline to finalize a trade agreement with Washington. In a last-minute effort to defuse tensions, President Cyril Ramaphosa held a direct phone conversation with U.S. President Donald Trump on Wednesday. The move followed warnings from industry bodies and the central bank itself that the tariffs could result in significant job losses.

Despite these concerns, Kganyago contextualized the trade relationship: “The U.S. is a significant trading partner for South Africa, but it is not as crucial as the European Union, China, or our Southern African neighbors.”

According to data from the South African Revenue Service, the U.S. accounted for approximately 7% of the country’s exports in June, compared to China’s 12% and Germany’s 8%.

The central bank’s latest economic projections, which include the effects of the higher U.S. tariffs, lowered its 2025 growth forecast by just 0.1 percentage points. Kganyago described South Africa’s expected growth rate of about 1% as part of a longer-term stagnation trend that has persisted for nearly a decade.

Financial markets appear to have taken the news in stride. South African assets performed robustly throughout the week, with analysts noting investor confidence in local firms' ability to adapt.

“Investors believe South African businesses will find ways to mitigate the impact of these tariffs and pivot to alternative markets,” said ETM Analytics in a research note released Friday.

As the government continues diplomatic engagement with Washington, policymakers and business leaders alike will be watching closely for signs of trade recalibration and resilience in the months ahead.