US President Donald Trump's 30% tariffs may not limited to the tech sector, but their implications for the SA digital economy, SMEs generally and ICT service providers are severe.
This is a sector built on fragile margins, export-driven business models, and global digital dependencies.
A 30% tariff — and the separate 10% tariff on companies aligned with Brics — threatens to undo years of hard-earned progress in transforming SA into a digital player on the continent.
As it stands at the time of writing, every product or service originating from SA that lands in the US will be slapped with a 30% surcharge from August 1 — specific sectors or industries are not targeted.
But SA’s tech exports — whether software services, BPO, data management or hardware components — are deeply integrated with American clients, platforms, and infrastructure.
Adding 30% to the cost of doing business is likely to price our companies right out of the market.
SMEs that rely on US trade are already asking, “Can our clients still afford us? Will we survive this margin cut?”
For our digital startups and locally owned tech firms, turmoil and pain lie ahead — potential job losses, stalled expansion, cancelled deals.
Many of us have clients or funding ties in the US, from accelerators like Y Combinator to data hosting agreements with AWS or Microsoft Azure.
Another thing: the new tariffs open doors to non-tariff retaliation, red-tape delays, exclusion from US tenders and developer platforms.
No olive branch
Meanwhile, if a SA tech firm decides to relocate manufacturing or service delivery to the US, the letter promises “zero tariffs”.
That’s not an olive branch — it’s a strategic lure aimed at hollowing out our local industry.
This puts locally owned ISPs, fintechs, healthtechs and edtechs in a double bind: absorb costs we can’t afford or uproot ourselves from the very economy we were built to serve.
This is not just about tech, or or even tariffs — it’s much bigger, but tech is where the economic damage will be most disproportionate.
This is because tech and digital services aren’t physically shipped — they are rendered through cloud, code, and cross-border contracts.
They rely on speed, price competitiveness, and seamless integration with global networks. All suddenly so fragile when tariffs and trade tensions enter the equation.
Tech is one of SA’s most promising exports, especially in areas like fintech, AI, cybersecurity, and e-learning.
These budding industries were going to help us leapfrog so many development gaps. Now they are under threat.
How does this tie into Brics, and why is there a separate 10% tariff?
It is all about geopolitical control. The US makes it clear: countries working with Brics to build alternative digital systems, like cloud infrastructure, data governance and financial rails, will be punished.
SA, as a Brics member, has pushed for multipolar digital platforms, many built with Chinese or Russian technology.
The US sees this as economic rebellion. The 10% is a signal to all Brics-aligned actors: play by US rules or get hurt.
Fork in the road
Can SA's young IT sector survive without the US tech ecosystem?
It’s a hard question.
The answer today is no — but it doesn’t have to stay that way, and it urgently shouldn't.
Right now, SA is deeply dependent on US software licensing, app stores, payment gateways and developer tools.
This tariff moment should force resilience, localisation and self-reliance. This is a call to action, not retreat.
What should SA do?
- Declare digital strategic assets — prioritise localisation of cloud, hosting, and digital payments infrastructure. Build local alternatives to ensure data sovereignty and reduce exposure to foreign policies;
- Create a digital tariff relief programme — support affected SMEs and export-focused tech firms with rebates, bridging capital, and subsidised access to alternative markets;
- Fast-track Brics-aligned infrastructure and trade systems — invest in Brics-wide alternatives like cross-border payment platforms, shared AI resources and independent undersea cable capacity;
- Negotiate bilateral tech trade corridors across Africa and Asia — create a digital trade zone within the African Continental Free Trade Area (AfCFTA) protected from external tariffs; and
- Mobilise the private sector — encourage big corporates, banks and universities to procure locally-built software and platforms.
The 30% tariff is not so much a tax as an ultimatum: “Help build the US or pay the price.”
SA should not allow itself to be economically strong-armed.
We are being forced to decide: fold under pressure, or double down on building a digitally sovereign, globally respected, locally grounded ecosystem.
The future belongs to those who control their code, their cables, their clouds, and their destiny.
The time to build SA is now.
Luvo is secretary-general of national lobby group Progressive Blacks in ICT
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