SA vehicle and components manufacturers say they don’t know yet whether their duty-free export access to the US is affected by President Donald Trump’s announcement of a 25% import tariff on automotive goods.
SA automotive exports benefit from the US government’s African Growth and Opportunity Act (Agoa), intended to provide trade opportunities for Sub-Saharan countries.
However, industry association Naamsa said on Thursday it was unclear if this benefit was overridden by Trump’s decision.
It said in a statement: “We are engaging with our members and other key stakeholders, including government authorities and trade partners, to determine whether Agoa preferences remain unaffected by the latest proclamation.”
Naamsa hoped for clarity “in the coming days”, adding: “Any potential disruption to trade flows will require close collaboration between industry and government to ensure the continued competitiveness of SA as a global automotive manufacturing hub.”
The SA motor industry is a major Agoa beneficiary.
In 2023, the last year for which complete trade figures are available, the industry exported R270.8bn of vehicles and components to more than 100 countries worldwide. Of that, R27.9bn went to the US. Most, R20.1bn, was vehicles.
BMW SA, which manufactures the X3 car range in Tshwane, exports 20% of production to the US. Also in 2023, SA imported R28.8bn of American goods, mainly components, for an automotive trade deficit of R900m.
Two-way trade totalled R56.7bn, making the US SA’s second-biggest automotive trade partner after Germany.
Trump’s announcement, on Wednesday, is intended to increase direct investment in the US motor industry. Its victims include neighbours Canada and Mexico, whose own industries are deeply intertwined with that of the US.
Renai Moothilal, CEO of the National Association of Automotive Component and Allied Manufacturers, said he suspected Agoa benefits would be affected but it would be prudent to wait until April 3, when the US is due to finalise its list of affected products.
He added that he was “deeply concerned” at the potential impact on SA component exports but suggested the effects would not be felt immediately.
Though Trump wanted overseas vehicle and components manufacture to move to the US, “you can’t start up overnight”, Moothilal said.
“It takes time to get manufacturing in place. I think short-term overseas contracts may be honoured while American companies tool up.”
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