President Cyril Ramaphosa has called for decisive national action following the recent US tariff hike on SA cars, a move that could severely impact the country’s automotive industry. In his From the Desk of the President newsletter, Ramaphosa warned that South Africa must remain alert and ready to respond to global economic shifts that threaten local industries.
“We must open our eyes and ears to what is happening in the world and prepare to respond effectively,” said Ramaphosa.
The United States recently announced higher tariffs on imported vehicles from several countries, including South Africa, citing the need to protect its local auto industry. The US tariff hike on SA cars raises concerns about reduced export competitiveness and job security in South Africa.
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Why the US Tariff Hike on SA Cars Matters
South Africa’s automotive sector is a key pillar of the economy. According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), automotive exports exceeded R200 billion in 2023, with the United States being one of the largest export destinations.
Leading manufacturers such as BMW South Africa, Ford Motor Company of Southern Africa, and Mercedes-Benz South Africa operate major plants locally, producing vehicles not just for the domestic market but also for international buyers, including the US.
With the new US tariff hike on SA cars, these manufacturers face increasing costs to access the American market. This could result in decreased exports, production slowdowns, and potential job losses across the value chain.
Government’s Strategic Response
President Ramaphosa stressed the need for proactive engagement with US officials and strategic internal planning. The Department of Trade, Industry and Competition (DTIC) has started consultations with automotive stakeholders to assess the tariff’s impact and develop mitigation strategies.
“We must not be passive observers of global trends. We need to respond strategically and with foresight,” Ramaphosa said.
One avenue under consideration is a renewed focus on intra-African trade through the African Continental Free Trade Area (AfCFTA), which offers new opportunities for regional exports and industrial expansion. Diversifying trade partnerships with markets in Asia, Europe, and other African nations may help buffer the impact of the US tariff hike on SA cars.
Driving Innovation for a Competitive Edge
Economists argue that this challenge could also be a catalyst for innovation in South Africa’s auto sector. Investment in electric vehicle (EV) technology, sustainable manufacturing, and green energy solutions could position local producers for long-term success.
Dr. Lwazi Mkhize, a trade analyst at the University of Pretoria, noted:
“South Africa must reduce its reliance on traditional export markets. The US tariff hike on SA cars is a chance to shift focus toward the future, especially electric mobility.”
Policymakers are exploring targeted incentives to encourage EV production and infrastructure development. These efforts align with South Africa’s commitment to green industrialisation as outlined in the Presidential Climate Commission and Just Energy Transition Plan.
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Protecting Jobs, Growing Smarter
The US tariff hike on SA cars has made it clear that South Africa must future-proof its economy through resilience, adaptability, and innovation. President Ramaphosa’s call for action is a signal to all sectors, government, industry, and labour to unite in protecting South Africa’s economic interests.
Through strategic trade negotiations, diversification, and forward-looking investment, South Africa can withstand this challenge and emerge even stronger.