Automotive Business Council Warns Trump’s Tariffs Could Devastate South African Auto Industry

The Automotive Business Council (Naamsa) has voiced serious concern over U.S. President Donald Trump’s latest tariff announcement, warning of potentially damaging consequences for South African auto industry. The new trade policy, labeled the “Liberation Day” measures by the Trump administration, includes sweeping tariffs on all imported goods — with South African exports facing some of the harshest penalties.

South African Exports Face Heavy Penalties

According to Naamsa CEO Mikel Mabasa, the introduction of a 30% blanket tariff on South African products entering the U.S. market is a major blow, one that could exacerbate already tense diplomatic relations between the two countries. In addition to this, vehicles not manufactured within the U.S. will now be hit with a 25% punitive tariff, further tightening the screws on South Africa’s automotive exports.

A Sector Already Under Pressure

Mabasa described the move as yet another significant challenge for a sector already navigating numerous economic and logistical headwinds. “We’re calling on the South African government to pursue all diplomatic avenues available to address this issue with the U.S. administration,” he urged. “The impact of these tariffs cannot be overstated.”

Costs Will Be Passed to US Consumers

He explained that South African vehicle manufacturers, already operating on tight margins, would not be able to absorb the added costs imposed by the tariffs. As a result, American consumers could face higher prices and fewer choices in the marketplace, particularly when it comes to South African-produced brands.

Urgent Diplomatic Engagements Needed

Emphasizing the urgency of the matter, Mabasa called for swift and focused trade talks. “It is imperative that government negotiators prioritize this issue to safeguard jobs, sustain consumer demand, and protect economic growth.”

Tariffs Threaten Strong US-SA Trade Relationship

The new tariffs are seen as part of a larger policy shift by the Trump administration toward so-called “reciprocal” trade measures. Mabasa warned that this shift could significantly disrupt South Africa’s export pipeline and unravel years of strong trade relations with the U.S.

Export Stats Reveal High Stakes

Currently, the U.S. stands as the third-largest market for South African vehicle exports. In 2024 alone, South Africa exported vehicles worth approximately R35 billion to the U.S., representing 6.5% of the country’s total automotive exports. The proposed 25% hike in import tariffs is expected to heavily impact several key manufacturers operating in the country, including BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota, and Volkswagen — all of whom produce vehicles in South Africa for the global market, including the U.S.

Potential Blow to Jobs and Investment

Speaking at the Gauteng Investment Conference in Johannesburg, Mabasa further cautioned that the consequences of these tariffs could ripple across the entire value chain, endangering jobs and discouraging future investments in South Africa’s automotive industry.

South African Auto Industry Trade Agreements at Risk

“These new trade barriers threaten to undo years of progress in terms of industrial development, employment, and international cooperation,” he noted. “They also undermine existing trade frameworks and the broader principles of fair, rules-based global commerce.”

Clarity on Agoa Still Needed

While refraining from speculating on the impact of these developments on the ongoing African Growth and Opportunity Act (Agoa) renewal discussions, Mabasa made it clear that the South African government must urgently seek clarity from the U.S. administration.

Naamsa to Advocate in Washington, DC

“We urge our government to enter into immediate and constructive discussions with their U.S. counterparts to ensure that South Africa’s automotive industry is not unfairly targeted under these measures,” he said. “The industry remains steadfast in its commitment to fair, open trade and will continue to advocate for policy frameworks that drive industrialisation and job creation.”

Global Advocacy Efforts Underway

Mabasa also confirmed that Naamsa will participate in the upcoming International Organisation of Motor Vehicle Manufacturers council meeting in Washington, D.C., where it plans to directly address U.S. officials on the potential damage these tariffs pose to the South African auto sector.

“We plan to use that platform to highlight the risks of these current policy directions and to defend the progress and investment we’ve made in building a globally competitive automotive industry,” Mabasa concluded.

Related article: Trump’s 25% US Import Tariffs Threaten South African BMW and Mercedes Exports