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There is still hope that the government trade negotiation teams will be able to strike a deal before the 30% tariffs come into effect.
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It is about to be a bumpy road for small and medium enterprises (SMEs) in South Africa from July due to the 30% United States (US) import tariffs, hikes in electricity and petrol prices and the uncertainty surrounding the interest rate announcement coming on 30 July 2025.
Miguel da Silva, group executive for Business Banking at TymeBank, says it is essential for SMEs to prepare for the impact of a 30% US import tariff, which is set to take effect on 1 August 2025.
The impact of tariffs on SMEs
Da Silva adds that the tariff hike is bad news for businesses that currently export to the US, especially those involved in the agricultural, automotive, and mining sectors.
“The tariff increases will also have repercussions for the broader economy, with commentators saying the move could lead to thousands of job losses across the affected sectors.”
He says there is still hope that the government trade negotiation teams will be able to strike a deal before the 30% tariffs come into effect.
In the meantime, President Cyril Ramaphosa has called on South African companies to accelerate their search for alternative markets in order to promote better resilience in both global supply chains and the South African economy.
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New export markets for SMEs
Da Silva says exporters have been seeking out new markets, taking advantage of trade agreements such as the African Continental Free Trade Area (AfCFTA) to strengthen intra-African commerce and lessen reliance on the US.
“The Brics+ bloc also presents an opportunity for local exporters to tap into major markets like China, Southeast Asia, Saudi Arabia, and the UAE.
“Already, China has announced a decision to eliminate all tariffs on imports from the 53 African countries, including South Africa, which is welcome news for SMEs looking for new markets.”
Electricity and petrol price increases
He highlighted that electricity and petrol price increases add to SMEs’ woes, but on the bright side, inflation appears to be under control.
“The US tariff blow comes at a time when South African SMEs are already facing margin squeeze because of additional cost pressures from energy price hikes and fuel price increases, all of which threaten not only their short-term profitability but also their long-term sustainability and competitiveness.”
According to the Bureau of Economic Research’s (BER) latest survey, inflation expectations have fallen to their lowest in four years.
“Respondents expect inflation to be below 4% this year, echoing the view of Reserve Bank governor Lesetja Kganyago.”
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Unemployment remains a concern
He has noted that there is modest growth and mixed expectations around interest rates, while unemployment remains a concern.
“GDP data for Q2 2025typically arrives on 25 July. The recent modest growth of 0.4% quarter-on-quarter suggests continued economic challenges, making this release vital for demand forecasting and timing market expansion.
“Expectations about the outcome of the 31 July South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) meeting, scheduled for 31 July 2025, are mixed.”
Interest rates to hold
Da Silva highlighted that most analysts believe interest rates will remain unchanged, while a few still see a possibility of a 25-basis-point cut.
“We hope the SARB decides to put growth above inflation control this time. In principle, lower interest rates mean more disposable income for consumers, which should ultimately result in increased spending and demand for goods and services from SMEs.”
He emphasised that there is an increased collaboration between the private sector, government, and financial institutions to foster funding and investment opportunities for SMEs.
“This may include government initiatives, revamped credit guarantee schemes, and partnerships with fintech companies.”
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