SA’s automotive industry is facing heightened pressure after the US imposed steep punitive tariffs on Pretoria, raising concerns about jobs, investment and diplomatic ties.
“The US decision to impose these tariffs undermines existing trade agreements and the principles of a fair, rules-based trading system,” said Mike Mabasa, CEO of Naamsa, an industry body group.
“The SA auto industry contributes significantly to economic development, employment and industrialisation, and these tariffs could undermine our progress. These announcements are yet another challenge to a sector already grappling with multiple headwinds.”
Mabasa’s comments on Thursday came a day after US President Donald Trump sent ripples through the global economy with “reciprocal tariffs”, including a steep, punitive 30% tariff aimed directly at SA goods.
The US ranks as SA’s third-largest destination for automotive exports. In 2024, it shipped more than 25,000 vehicles to the US, with exports valued at R35bn.
But Pretoria struck a conciliatory tone, with President Cyril Ramaphosa and trade, industry & competition minister Parks Tau saying SA would engage with Washington rather than retaliate with tariffs.
Pretoria’s stance could be seen as lacking the stomach for a fight as retaliatory tariffs could raise the costs for domestic consumers and businesses reliant on imported raw material.
The 30% new tariff structure exempts some of SA’s metal exports to the US. These include manganese, uranium and chrome, including the scrap of these materials and stainless-steel scrap.
SA’s agricultural and automotive sector, however, is expected by market watchers and policymakers to be one of the worst affected when the tariffs come into effect in a week.
“The tariffs affirm the urgency to negotiate a new bilateral and mutually beneficial trade agreement with the US, as an essential step to secure long-term trade certainty,” Ramaphosa’s office said on Thursday.
Speaking on the sidelines at the 2025 PGMs Industry Day on Thursday, Tau said a country such as SA could not simply institute reciprocal tariffs.
“I think we need to be cognisant of the need to engage more proactively in finding solutions. We shouldn’t have a knee-jerk reaction to the announcements in the US,” he said.
SA is one of 50 African countries on which the Trump administration has imposed reciprocal tariffs. Namibia (21%), Eswatini (10%), Lesotho (50%) and Botswana (37%), which are also part of the Southern African Customs Union, have also been hit with high tariffs.
Trump’s claim that SA imposes 60% tariffs on US goods, on which the administration based the reciprocal 30% levy, is inaccurate as the overall tariff is about 7.1%.
The EU and the UK have all vowed retaliation while urging the Trump administration to review its decision to impose the high tariffs on what he called “Liberation Day”.
The 30% tariffs imposed on SA are in addition to the recent 25% tariffs that the US has levied on all foreign-manufactured cars. SA, even as a beneficiary of preferential access to US markets through the African Growth & Opportunity Act (Agoa), is set to be adversely affected by the tariffs.
Section 232 of the new tariff regime ushered in by the US Trade Expansion Act means vehicles manufactured in SA will be taxed as those from non-Agoa beneficiary countries.
“Our concern is that we produce less than 1% of global automotive vehicles... So, in reality, the impact on us is likely to be more disproportionate than those of our peers who produce at the same level,” Tau said.
“The risk is creating a concentration risk in countries that have greater capacity and are building more [cars]. Those countries would be able to absorb some of this. The reality is we’re likely to be affected more disproportionately.
“But these are arguments we will make to our colleagues in the US.”
Regarding Agoa, Tau said there was no firm announcement on its fate. “The US has agreed to hold an Agoa summit this year, and African ministers will formulate their position to present to the US.”
Solutions
With industry players gathered at the PGMs Industry Day, Tau stressed the importance of discussing solutions among industry players and the government, especially in light of the recent US tariff announcements.
The Minerals Council SA expressed concern despite platinum group metals (PGMs), coal, gold, manganese and chrome being excluded from the latest US tariffs.
“Though these exclusions are welcome, we remain concerned about the negative effects on business and consumer sentiment, which could ultimately affect global real GDP growth,” said Hugo Pienaar, chief economist at the council.
“This unprecedented upheaval in world trade poses a significant threat to global growth, which is bad news for the entire SA mining industry,” he said.
Pienaar said that while PGMs were excluded from the tariff increases, the US administration’s decision to impose a 25% tariff on vehicle imports would lead to higher vehicle prices in the US.
“This will not only dampen demand for automobiles in the US, but car manufacturers in other regions may also scale back production as a result,” he said.
“The ripple effects of these tariffs could indirectly reduce demand for platinum used in catalytic converters, affecting SA’s mining sector.”
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