The impact of US tariffs on South Africa’s automotive sector is already being felt, even though the official implementation is only set for 1 August 2025. Vehicle exports to the United States have dropped sharply, and the ripple effect is spreading across the local economy. Factories are scaling back. Jobs are under threat. The damage has started before the tariffs have even kicked in.
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Exports Already Plummeting
South Africa’s vehicle exports to the US dropped by 73% in the first quarter of 2025. In April and May, they declined further by 80% and 85% compared to the same months in 2024.
This sudden fall comes after the announcement of steep new tariffs. The US plans to apply a 30% general tariff and an additional 25% duty on certain vehicles. This makes South African cars far more expensive in the US market, where price plays a big role in consumer choice.
These numbers show the impact of US tariffs on South Africa’s automotive sector is already serious. Even before the official start date, buyers in the US are pulling away.
Jobs at Risk
The industry is one of South Africa’s biggest employers. Around 100,000 jobs are now at risk, according to the South African Reserve Bank. These include workers at car plants, parts manufacturers, logistics firms, and suppliers.
Areas like Tshwane, East London and Durban could be hit hard. Many families rely on jobs linked to the car manufacturing industry. The drop in exports means lower production, fewer shifts, and possible retrenchments.
The impact of US tariffs on South Africa’s automotive sector goes beyond numbers; it affects people’s lives and communities.
Trade Benefits Undermined
South Africa has enjoyed duty-free access to the US market under the African Growth and Opportunity Act (AGOA). This gave local exporters a big advantage.
But the new US tariffs cancel out those benefits. Now, countries like Mexico and Japan, which are not hit by the same duties, can offer cheaper vehicles to the US.
This shift puts South African producers at a disadvantage. US importers are already turning to other sources. The impact of US tariffs on South Africa’s automotive sector is weakening our position in a key market.
Government and Industry Responses
The South African government is trying to respond. Officials are reviewing support schemes for local manufacturers. One option is to boost the Automotive Production and Development Programme (APDP), which provides tax breaks and incentives to automakers.
But industry leaders warn this may not be enough. NAAMSA, the industry’s representative body, says the country must act quickly to avoid lasting damage.
Mikel Mabasa, NAAMSA CEO, says the industry can’t rely on the weak local market. He believes the country must focus on building export capacity and investing in electric vehicle (EV) technology. The industry needs to evolve fast to stay competitive.
Trade Negotiations Underway
Behind the scenes, South African officials are trying to negotiate with the US. According to reports, one proposal involves increasing South Africa’s imports of liquefied natural gas (LNG) from the US. In exchange, the US may ease tariffs on vehicle exports.
While nothing has been finalised, any deal could reduce the pressure. These talks matter because the impact of US tariffs on South Africa’s automotive sector could grow even worse if nothing changes.
Agriculture Also Feels the Pressure
The automotive industry isn’t the only sector in trouble. US tariffs now also apply to some South African agricultural exports, including citrus fruit, wine, and table grapes. These products support rural jobs and farming communities.
Like cars, South African farm goods are now more expensive in the US. Exporters are losing contracts, and workers in agriculture are also at risk.
The impact of US tariffs on South Africa’s automotive sector is part of a wider crisis affecting several industries.
READ MORE: Trump Sets 30% Tariff on South Africa: What It Means for Trade
What Can Be Done?
South Africa must act fast and smart. Here are some steps to manage the situation:
- Find new markets: South African automakers need to increase exports to other regions such as Asia, Latin America, and fellow African countries under the AfCFTA.
- Boost local demand: The government can support local buyers through tax breaks or subsidies for buying South African-made vehicles.
- Invest in electric cars: Global demand for EVs is rising. South Africa should position itself as a player in clean vehicle manufacturing.
- Work with industry: Government, labour unions, and manufacturers must work together on plans to protect jobs and build a future-proof automotive sector.
The impact of US tariffs on South Africa’s automotive sector is already severe. But smart, coordinated action could help the industry survive and adapt.