Denise van Huyssteen, CEO of the Nelson Mandela Bay Business Chamber, says urgent action will be needed to prevent a jobs bloodbath in the Eastern Cape’s economic heartland in the wake of US President Donald Trump’s global tariff blitz.
“We need absolute speed and we need action. There’s too much talking, too many meetings. People need to move now,” Van Huyssteen says. “This is like a perfect storm where everything, at a local, national and global level, is happening all at once.”
She says the Nelson Mandela Bay region will be worse hit by the 30% tariffs than other parts of the country. (On Wednesday Trump announced he was pausing his new tariffs for most countries, including South Africa, for 90 days. Other sectors will pay 10%.)
“Our economy is very much a manufacturing economy anchored by the automotive sector.”
Almost half the country’s automotive sector is based in the region, providing about 60,000 direct jobs while 750,000 are employed by their component suppliers. “So we’re very reliant on this sector.”
Van Huyssteen tacitly admits this is an understatement because she doesn’t want to exacerbate the sense of crisis caused by the US tariff announcement. The fact is, there’s no concealing the likely scale of the crisis for the region, which already has one of the highest unemployment rates in the country.
“People are very focused on those companies currently exporting to the US, but you need to look at this from a global perspective. Because global manufacturers will be looking at their supply chains to determine where is the best place to manufacture from a tariff point of view.”
Why would global auto manufacturers who make vehicles in South Africa almost entirely for export remain in the country when, as she says, places such as Morocco and Egypt will be paying US import tariffs of 10% vs South Africa’s 30%? Plus, she adds, they’re closer to export markets.
“We’re still a better option for global auto manufacturers because of the depth of our supply chain. This is our one saving grace for now, but those countries are quickly developing their own supply chains.”
The risk of deindustrialisation posed by their withdrawal has just got a whole lot higher, she says. Far more needs to be done to protect what is a “huge asset” for the country.
To stop head offices in Japan and Germany from relocating their plants an enabling environment of efficient and reliable rail, ports, roads, electricity, water supply and local government “needs to be created with absolute speed so that we make South Africa a more compelling and internationally competitive investment destination”.
It’s about rolling up our sleeves and finding solutions very quickly. Trump has caused a seismic shift
“It’s about rolling up our sleeves and finding solutions very quickly. Trump has caused a seismic shift around the world where you’re not playing according to normal trade rules anymore.”
South Africa needs to look at signing free trade agreements with its Brics partners and Southeast Asia and strengthening trade relations with the EU, “and doing all of that with absolute speed”, she says.
“We also need to convince the US to reduce tariffs. That’s something South Africa needs to explore with urgency and speed.”
Having no ambassador in Washington won’t make this any easier. “It would certainly help our case if we had the right person on the ground there,” Van Huyssteen says.
She and her team met the Eastern Cape premier, Oscar Mabuyane, and his team this week. “We need to see urgency and speed and action. We need to see the province deploying whatever is in their control to provide a more supportive environment for business to prevent a jobs bloodbath.
“We need a stable municipality. We’ve done a lot in partnership with various stakeholders in NMB and the potential is there. But we do need stability within the municipality. We continuously have city managers that come and go. We need permanent appointments, we need competent people running infrastructure portfolios like water, electricity and sanitation.”
To run a factory or an auto manufacturing plant certain basics need to be in place, she says.
“Some things are within our control, many things are not. Different stakeholders have different roles to play to make business more resilient and able to counter these trade threats, and they need to play those roles. They need to understand that we need to protect jobs, we need to prevent job losses.”
Depending on how alliances change globally, if South Africa plays its cards right it could put itself in a more favourable position with the EU, for example, Van Huyssteen says.
“That’s the type of thinking we need to deploy. We’re not trying to create alarm or panic. What we want is urgency. We want people to accelerate efforts to get things on track and make the environment more investor-friendly. It starts with that. It becomes easier for companies to justify their ongoing existence in the country, especially as decisions get made globally on how the global manufacturing footprint should work going forward.”
She thinks key stakeholders fail to appreciate the full scale of the threat.
“People are still under the view that it’s only companies that trade with the US that will be most impacted. Our view is that this is a global issue because it changes trading parameters all around the world. We can’t just look at who trades with the US, we have to look beyond that. This is where people need to start thinking differently.”
This means paying more attention to Brics, for example. “If we really want to make that alliance work then we should actually have free trade agreements in place.”
South Africa is the second-largest citrus exporter in the world but South African citrus producers wanting to export to India — the “I” in Brics — face a 40% import tariff.
“South Africa needs to unlock the benefits of being part of Brics.”
Global trade volatility will present opportunities for South Africa to exploit, “but to do this we need to become more internationally competitive, fast. We’ve got to be resilient, agile and innovative in how we respond.”
That’s also how to retain investment and employment in Nelson Mandela Bay, “which is my No 1 goal now. That’s the most critical thing.”
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