Tariff Tsunami Hits South Africa's Car Industry

It faced challenges even before the Donald Trump administration's tariff policies, with increased competition from imports and weak domestic demand. But the tariffs are a further blow.

Vehicle exports to the US have benefitted from the African Growth and Opportunity Act Agoa, which has allowed duty-free access to the US market. Now the sector is facing a 25 tariff on foreign-made vehicles and components, as well as the 30 tariff on South African imports that was suspended for 90 days.

The US was the destination of 6.5 of vehicles exported from South Africa last year, but that figure had grown 22 from the year before, making the US the fastest-growing region for our vehicle exports. The tariffs will have a significant impact on models that are exported there, in some cases dealing major blows to the factories and towns where they are produced, with ripple effects throughout the value chains that link to them.

Of course, South Africa is in the same position as many other countries facing US tariffs. But if we are to forestall the impact on our industrial base, we must act.

The first step is to try to engage US leaders to shift course. US foreign policy, through Agoa, has long reflected an understanding of the strategic importance of growing Africa's economies and building them as source markets for US consumers.