The 30% tariff imposed on SA exports to the US is a socioeconomic crisis in the making for SA’s automotive sector, according to motor industry body Naamsa.
SA failed to reach a trade deal with the US by the August 1 deadline, resulting in President Donald Trump imposing the tariff, to take effect from the first week of August. It is expected to potentially cause job losses in SA’s automotive and agriculture industries.
“The imposition of these tariffs is deeply disappointing and has far-reaching implications. Without an urgent trade remedy, the socioeconomic fallout could be severe,” said Naamsa CEO Mikel Mabasa on Friday.
The tariffs — and the broader uncertainty in US-Africa trade relations — strike at the heart of SA’s industrialisation agenda and threaten future investment in high-value manufacturing, said Naamsa.
“For SA’s automotive sector — already bearing the brunt of a sharp export contraction to the US market in the first half of 2025 — this latest development is a relative loss of competitiveness as peer countries retain or negotiate lower rates.
“Though some sectors, such as base metals, will remain largely exempt, the automotive industry stands exposed, both in immediate volumes and long-term market access.”
He said US tariffs would potentially disrupt thousands of jobs, eroding hard-won industrial capabilities and destabilising automotive export-reliant communities such as East London.
SA vehicle exports to the US have dropped more than 80% — from 16,112 to 2,875 units — in the first half of the year compared to 2024 after Trump imposed a 25% tariff on all vehicles imported into the US in April.
Most of those were C-Class cars built at Mercedes-Benz SA’s East London factory. Among SA’s seven carmakers, MBSA is most exposed to the US tariffs.
A small number of Ford Ranger bakkies built in Silverton were exported to the US this year, while BMW SA, which formerly exported to the US, has shipped no vehicles there in 2025.
MBSA recently suspended production in East London for several weeks due to reduced demand for its cars after announcing plans in June 2024 to shed 700 jobs. The move led to speculation that MBSA might disinvest from SA, but the company denied this, saying no decision had been made for the brand to exit the country..
After the announcement of the 30% tariffs on Friday, MBSA said: “We are continuously assessing the impact of the introduced US-tariff lines for the auto industry. As a global company, we rely on constructive co-operation and policies that promote mutually beneficial trade across international markets.
“Mercedes-Benz supports free and fair trade that underpins prosperity, growth and innovation. It is now important that SA and the US remain in a constructive dialogue and reach a fair negotiated solution that is in the interests of both sides,” said Thato Mntambo, GM of corporate affairs at MBSA. She did not say whether the latest tariffs would lead to further job cuts at the factory.
Vernon Sinden, head of logistics at Investec, said SA’s global share of US-destined automotive exports is 6%, so the significant new tariffs will affect the economy and unemployment in the short term.
“The US is SA’s second-largest trading partner and a crucial market for vehicles produced in the country, which have historically enjoyed duty-free access under the US African Growth and Opportunity Act [Agoa],” he said.
In 2024, SA exported R28.7bn of automotive products to the US, which included 24,681 vehicles and R4.4bn in components used in US vehicle production. In 2024, the motor sector accounted for 64% of all Agoa trade between SA and the US.
The tariff disruptions place pressure on original equipment manufacturers (OEMs) who have made long-standing industrial commitments to SA and invested significantly in local manufacturing, skills development and export infrastructure, said Mabasa.
“We are not giving up on the US market, but we must now also look to deepen regional trade, expand market access in Africa and Asia, and accelerate the rollout of SA’s new-energy vehicle [NEV] transition strategy to attract new investment and safeguard production capacity.”
While SA exports to the US had dropped sharply, year-to-date exports overall were still 2.5% ahead of the same period in 2024, said Naamsa, attributing this to diversified destination markets, strong bilateral demand and effective supply chain adjustments by OEMs.
“This resilience reflects the sector’s expanded global reach to over 109 markets for vehicle exports in 2024 — leveraging long-standing trade relationships, among others,” said Mabasa.
“However, pressure is mounting as other export-orientated nations begin to redirect their product volumes towards SA’s established markets.
The government said on Friday it would draft measures to support exporters hit by Trump’s new 30% tariff, after SA was unable to negotiate a deal with the US in which it offered to buy US liquefied natural gas and invest in US industries in exchange for a lower tariff.
The negotiations came amid tensions between the two countries over SA’s foreign policy and affirmative action laws. The department of trade, industry & competition has launched an export support desk to assist affected companies and advise on alternative markets.
President Cyril Ramaphosa said the government was finalising a support package for vulnerable exporters, with details to be announced soon.
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