Taxation & Regulation
Trump's trade war: US slaps 30% tariff on South African imports
Katja Hamilton 2 days
PGMs, coal, gold, manganese and chrome: Excluded from US tariffs but not out of danger
The majority of South Africa’s minerals and metals sold to the US have been excluded from the tariffs announced by President Trump, but this not mean the tariffs will not affect them.
Source: © MiningMX MiningMX platinum group metals (PGMs), coal, gold, manganese and chrome are exclsuved from the US's recently announced import tariffs
The platinum group metals (PGMs), coal, gold, manganese and chrome are excluded from the tariffs.
South Africa is the world’s leading source of PGMs, manganese, chrome and vanadium, which are all critical as energy metals.
In 2024, total South African exports of mineral products and precious metals to the US amounted to R65.3bn, with PGMs accounting for 76.3% of the total.
Bad news for the SA mining industry
The Minerals Council South Africa has expressed concerns that the sweeping tariffs imposed by the US government on imports from foreign countries will potentially damage global economic growth with a resultant lower demand for South Africa’s minerals.
“Despite the exclusions, we remain concerned about the adverse impact on business and consumer sentiment and the resultant feedthrough to business investment, consumer spending and ultimately global real GDP growth caused by this unprecedented upheaval in world trade.
“Global growth coming under threat is bad news for the entire South African mining industry,” says Hugo Pienaar, chief economist at the Minerals Council.
Vehicle tariffs bad news for PGMs
He adds, “Even though PGMs are excluded from the latest round of tariff increases, vehicle prices in the US will increase because of the 25% tariff the Trump administration has imposed on all vehicle imports.
“Not only will this slow demand for automobiles in the US, but car makers in other countries are likely to moderate production as a result,” he says.
Platinum, palladium and rhodium are used to make autocatalysts for vehicle exhausts to scrub out pollutants.
If car and truck sales slow, demand for PGMs will reduce and result in volatile near-term prices. In the longer term, we remain positive about the outlook for PGM demand and prices.
“Concerning PGMs, there is an opportunity for increased market development given the potential that remains with internal-combustion engines, the green hydrogen economy and jewellery as well as other yet-to-be-developed technological applications that our members are driving through research,” says Mzila Mthenjane, CEO of the Minerals Council.
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A shield to the SA economy
On a positive note, the mining industry does provide some shield to the South African economy in these challenging times.
This in the form of the gold price that remains firmly above $3,000 an ounce, or about R1.8 m per kilogram, with investor and central bank demand for gold rising during these uncertain economic times.
Another silver lining for mining is that the global uncertainties and renewed concerns about the government of national unity have weakened the rand against the dollar.
If sustained, orderly and not accompanied by notable domestic cost increases, the weaker rand should increase the competitiveness of South African mineral and other exports.
Note that iron ore and diamonds will be subject to the 30% reciprocal tariff on imports.