Allianz Trade, a trade credit insurance unit of German insurance major Allianz, expects SA’s exports to the US to decline by as much as $4bn (R72bn) in 2025/26 should the incoming Donald Trump administration follow through on its tariffs pledge, with car manufacturing set to be one of the most affected sectors.
However, Allianz Trade said SA’s key platinum sector, one of the country’s largest employers, will largely be insulated from the imminent tariffs.
Allianz Trade, in a report looking at what impact Trump’s second presidency of the world’s largest economy means for global trade, said SA’s export landscape was “poised for a challenging period”.
It said that in the event of increased tariffs from the US, coupled with retaliatory measures, SA could face export losses amounting to $4bn over 2025/26.
“The upcoming Trump administration is considering tariffs to overall imports, hence we are assuming an increase of up to 5% to imports from all countries (excluding China, Canada and Mexico, which will have another rate), with the exception of critical dependencies, imports from SA that are essential to the US,” analysts from Allianz Trade said.
“As a result, we have come across the products that will be both most and less affected in SA. Let me start with less impacted: this will be precious metals and chemicals, specifically SA critical dependencies to the US, which include platinum (which in 2023 accounted for $5bn and about half of all SA exports to the US), wattle extract and sodium dichromate (chemical products).
“On the other hand, the most negatively affected exports will be those that are currently exported the most to the US. These sectors include regular metals, such as aluminium or iron, which account for around 15% of total SA exports to the US, $1.5bn in value; manufactured products, such as cars (10% of total exports, about $1bn); machinery (5.5%, $600m); and agriculture (above 3% of all US exports, $350m).”
The expected decline in exports of cars from SA to the US bodes ill for the sector already struggling as consumers opt for used cars over new vehicles, while exports are also on a decline.
Car exports
According to the latest industry data, exports from January to October have plunged 23.25% to 253,023 units, with October’s data showing a steeper decline.
Naamsa said the October export sales of 23,342 units reflected a decrease of 17,324 vehicles, or a loss of 42,6%, compared with the high-based 40,666 vehicles exported in October 2023.
According to the Observatory for Economic Complexities, SA in 2022 exported $6.8bn worth of cars, with the main destinations being Germany, US, Japan and Australia.
Allianz Trade projects that SA’s resurgent platinum group metals (PGMs) is good news for the sector, which has shed about 10,000 jobs this year, adding to the business case for the sector.
SA is the world’s largest PGM producer. PGMs are strategic inputs, often used in metal alloys by many industries, such as the automotive industry (catalytic converters to treat exhaust emissions).
The slow uptake and production of electric vehicles has seen investors flock back to PGM stocks as their long-term demand outlook improves.
The US recently amended its mining regulations to bring down costs for PGM miners operating in the country, including SA’s Sibanye-Stillwater.
The bill grants a 10% production credit for goods that use critical minerals — which, in the US context, includes platinum and palladium — allowing companies to claim back 10% of their production costs.
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