Banele Ginidza

The Automotive Business Council (Naamsa) has warned that the United States' move to hike tariffs by up to 30% for South Africa's vehicle exports could have serious implications for jobs and investment in the local industry.

US President Donald Trump on Wednesday announced that his administration was introducing additional tariffs on all imported products under what has been termed ‘Liberation Day’ trade measures.

The US is the third-largest destination for South African automotive exports, with approximately R35 billion worth of vehicles shipped in 2024, accounting for 6.5% of total vehicle exports in 2024.

Vehicles produced outside the US will face apunitive 25% tariff immediately, and other automotive products are now also impacted.

Naamsa on Thursday said these tariff decisions, seen as part of a broadershift toward reciprocal tariffs, threatens to disrupt South Africa’s automotive exports andundermine our longstanding trade relationship with the US.

Naamsa said that while it hoped the South African government will activate all available diplomatic channels with the Trump administration, these recent announcements were yet another challenge to a sector already grappling with multiple headwinds.

Speaking at the sidelines of the Gauteng Investment Conference, Naamsa CEO Mikel Mabasa said the proposed tariff costs cannot be absorbed by manufacturers, resulting in additional costs for US consumers and a reduced choice of South African-produced brands.

Mabasa said the proposed tariff increase will severely impact local manufacturers operating in South Africa, including BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota and Volkswagen - who produce vehicles for global markets, including the US.

"The US decision to impose these tariffs undermines existing trade agreements and the principles of a fair, rules-based trading system. The SA auto industry contributes signi]cantly to economic development, employment, and industrialisation, and these tariffs could undermine our progress," Mabasa said.

"While we hope the South African government will activate all available diplomatic channels with the Trump administration, these recent announcements are yet another challenge to a sector already grappling with multiple headwinds."

Naamsa said it would not preempt how this will impact the renewal engagements on African Growth and Opportunity Act (Agoa) at this time, but urged the South African government to engage the US administration to urgently seek clarity on Agoa’s future and ensure that South Africa’s automotive sector is not unfairly penalised under these new trade measures.

Mabasa stated that they intended to use this opportunity to lobby and advocate for South African positions, highlighting how the current policy postures of the US administration will hinder the progress made in the development of the auto sector in South Africa.

He said the South African automotive industry remained committed to fair and transparent global trade and will continue advocating for policies that supported industrial growth and job creation.

Mabasa confirmed that naamsa will attend the Council meeting of the International Organisation of Motor Vehicle Manufacturers [OICA] next week Tuesday hosted by the US in Washington, DC.

Export sales for new vehicles recorded an impressive increase of 9 354 units, or 31.1%, reaching 39 477 vehicles in March, which is 15.7% higher than March 2023 exports, marking the first export growth in 10 months, signalling renewed momentum in South Africa’s global trade position.

Meanwhile, Minister of Trade, Industry, and Competition Parks Tau this week announced that South Africa will urgently seek a meeting with US authorities. This discussion will focus on the implications of the US decision to impose a tariff on automobile imports, a move that could significantly impact South Africa's automotive sector.

In a media statement issued this week, Tau expressed concern over the US decision to impose tariffs. He pointed out that South Africa’s automobile exports account for just 0.99% of total U.S. automobile imports and 0.27% of auto parts, emphasising that these figures do not pose a threat to the US industry.

"Automobile exports from South Africa accounted for 64% of South Africa’s exports under AGOA in 2024 and are therefore a significant component of products currently benefiting under the preferential programme," Tau said.

"South Africa’s exports of automobiles account for only 0.99% of US total automobile imports and 0.27% of auto parts and thus do not constitute a threat to US industry."

BUSINESS REPORT