The OEMs have made long-standing industrial commitments to South Africa and invested significantly in local manufacturing, skills development and export infrastructure.

The Automotive Business Council (naamsa) has noted the official communication from US President Donald Trump to the South African Government regarding the imposing of tariffs on imported goods from South Africa.

“We have also taken note of President Cyril Ramaphosa’s formal response on the same day, which confirmed South Africa’s diplomatic and strategic approach to this matter.

“South Africa’s automotive sector is particularly vulnerable to the 25% sectoral tariff imposed under Section 232 of the USA Trade Expansion Act of 1962, which specifically targets automotive exports. This escalation in trade tensions poses a serious threat to one of South Africa’s most globally integrated and export-orientated industries,” naamsa says in a statement.

The USA has consistently been South Africa’s second-largest trading partner and key export destination for SA-manufactured vehicles. Since the inception of the African Growth and Opportunity Act (AGOA), the automotive industry has benefited from substantial two-way trade and investment.

In 2024, the auto sector accounted for 64% of all AGOA trade between South Africa and the USA, generating R28.6 billion in export revenue, with 24 681 vehicles exported to the United States under AGOA.

Naamsa says the announcement and anticipation of the recent tariffs have had a devastating and immediate impact on trade performance – even before the formal effect of the tariffs. Vehicle exports to the USA dropped by 73% in Q1 2025, followed by a further decline of 80% and 85% in April and May, respectively. This represents a risk of a direct loss of vehicle and component export volumes and annual export earnings, which would be difficult to recover in the short term.

The impact:

“This is not just a trade issue – It’s a socio-economic crisis in the making. The USA tariffs directly threaten thousands of jobs in our sector, disrupt hard-won industrial capabilities and risk devastating communities such as East London, where the auto sector forms the economic heartbeat of the town. If we cannot retain export markets like the USA, we risk turning vibrant industrial hubs into ghost towns,” says naamsa CEO, Mikel Mabasa.

“Export diversification and finding new markets are not things that can be achieved overnight. Our global competitors are already redirecting their exports into markets we traditionally serve. This intensifies the pressure on our OEMs, which must now absorb rising costs, reduce production and reconsider future investments,” he adds.

Defending the export-led industry:

The SA automotive industry is a cornerstone of the economy, contributing an impressive 22.6% to total domestic manufacturing output and directly supporting over 110 000 formal sector jobs. The tariffs – and the broader uncertainty in USA-Africa trade relations – strike at the heart of South Africa’s industrialisation agenda and threaten future investment in high-value manufacturing. They also undermine the significant progress made under AGOA to deepen USA-Africa trade.

Engagement with the USA:

Naamsa welcomes the SA government’s continued diplomatic engagement with the USA, including discussions held on the sidelines of the USA-Africa Summit in Luanda on 23 June this year, and the submission of SA’s Framework Deal on 20 May to address the concerns raised by the USA.

“We urge both governments to accelerate negotiations toward a balanced, rules-based trade agreement. We are encouraged by early proposals for a quota of 40 000 duty-free vehicle units per annum, which would allow us to retain our footprint in this key market. It’s vital that we use this opportunity to preserve the business case for continued investment,” says Mikel.

Naamsa says it continues to engage closely with government counterparts, providing data and strategic insights to support trade negotiations. They are also urgently exploring additional export markets beyond the USA.