South Africa plans US meeting on looming auto tariffs

Tau said that South Africa's exports of automobiles account for only 0.99% of US total vehicle imports and 0.27% of auto parts 'and thus do not constitute a threat to US industry'.

Johannesburg: South Africa will seek a meeting with US authorities on auto tariffs, Trade Minister Parks Tau said on Tuesday, noting the levies are a concern as the country has preferential trade status with the United States.

South Africa, whose exports of vehicles and parts into the United States is estimated at over $2 billion, could be hard hit by a planned tariff of 25% on automobile imports US President Donald Trump made public last week.

Tau said in a statement that the U.S. Section 232 tariffs are expected to apply to imports of cars and car parts from countries, including South Africa, that benefit from the U.S. African Growth and Opportunity Act (AGOA).

AGOA provides duty-free access to the U.S. market for most agricultural and manufactured products, such as cars and parts exported by eligible African countries.

"Automobile exports from South Africa accounted for 64% of South Africa's exports under AGOA in 2024, and are therefore a significant component of products currently benefiting under the preferential programme," Tau said.

While South Africa's car exports to the United States are duty-free under AGOA, U.S. imports into South Africa also receive rebates under the country's Automotive Production Development Programme.

South Africa's exports of automobiles account for only 0.99% of U.S. total vehicle imports and 0.27% of auto parts "and thus do not constitute a threat to U.S. industry," Tau added.

"South Africa will seek a meeting with the United States authorities to discuss these developments, given the potential negative effect on the South African economy," Tau said.

The representative body of South Africa's automotive industry, NAAMSA, has said that it was actively assessing the potential impact of these tariffs and was engaging with its members and other stakeholders.

Among the car brands that South Africa exports to the U.S. are Mercedes-Benz and BMW.

The CEO of the National Association of Automotive Component and Allied Manufacturers Renai Moothilal told Reuters the association will await further clarity on the full list of components that will be covered by this proclamation.

"In the short term, it's possible the result is consumer inflation for auto products in the U.S.," Moothilal said.

The removal of duty-free access "over the long term will hurt the competitiveness of local component companies who need the scale brought upon by being able to trade freely into the U.S. market," he added.