A 30% US tariff has sent exports to America plummeting , but the damage goes far beyond one market
“The wine industry has demonstrated resilience, achieving value growth in exports despite declining volumes. However, structural constraints continue to hold the sector back.” — Rico Basson, CEO, South Africa Wine
South Africa’s winemakers are staring down the consequences of a trade war they did not start. Since US President Donald Trump imposed a 30% tariff on South African exports in August 2025 , one of the steepest rates outside China, the full economic toll is only now coming into sharp focus. Food For Mzansi
The numbers are stark. Packaged wine exports to the US fell 21% in volume and 23% in dollar value in 2025, according to South Africa Wine. Business Day Overall, US exports , now South Africa’s fifth-largest wine market, tumbled 28% to just $28 million. FW Africa And industry bodies warn the worst may still be ahead: the full effect of the tariff “will only become evident later this year” as updated trade data is released. Just Drinks
The Tariff Trap
The US’s complex three-tier distribution system , where importers, distributors and retailers each add a margin , means a 30% tariff could translate into a 45–50% increase in retail prices for South African wines. Wine That pricing shock makes competing on American shelves nearly impossible.
Competitors such as Chile and Argentina face only a 10% tariff, while EU and Australian wines are taxed at 20%, placing South Africa at a clear disadvantage. Around 200 of the nation’s 512 wine estates export to the US, and many are heavily exposed to this market. The Grape Reset
A new UN Conference on Trade and Development (UNCTAD) global trade update this month confirmed the scale of the competitive damage, finding that South African wine is about 17 percentage points more expensive in the US relative to other imports compared to 2024 prices , a structural disadvantage that won’t vanish when shelf promotions end.
“Countries need to monitor their relative tariff positions closely, diversify export markets where access tightens and seize openings where preferential margins improve.” — UNCTAD Global Trade Update, February 2026
A Double Squeeze
The tariff is only part of the problem. As French and Italian producers lose access to the American market, they redirect surplus wine to Europe , South Africa’s main export region , creating oversupply and driving down prices in Germany, the UK and Belgium, all key destinations for South African wine. Vinetur In other words, US tariff policy is hurting South African exporters in markets they never competed with America in.
Total wine export volumes fell 13.8% to 264 million litres in 2025. Bulk wine volumes recorded the steepest decline, dropping nearly 20%. FW Africa The broader picture, per industry body data, shows export value in rands fell 4.7% to R9.8 billion, a concerning reversal after growth in 2024.
Finding New Ground
There are genuine bright spots. African markets delivered strong growth, with their share now exceeding 10% of total export value. Exports to Africa rose 13% to $55 million in 2025, with Kenya up 10%, Zambia up 22%, and Uganda up 24%. FW Africa The UK remained the anchor export market at $145 million.
South Africa’s government signed a duty-free agreement with China and is in active negotiations with Washington for a bilateral trade framework. But a deal has yet to materialise, and diplomatic relations remain fraught, Pretoria has refused to retaliate or sever ties, with trade minister Parks Tau stating: “We have no intention of decoupling from the United States.” The Africa Report
The wine sector employs around 270,000 people in a country with persistently high unemployment. The Grape Reset For rural communities in the Western Cape’s Stellenbosch and Franschhoek valleys, the ripple effects of lost export revenue are not abstract, they translate directly into livelihoods.
The message from South Africa’s wine industry is one of cautious resilience: adapt, diversify, premiumise. But as UNCTAD makes clear, the window for that pivot is narrowing.
