SA SCRAMBLE AS TRUMP LAUNCHES TRADE WAR

THE South African government is scrambling to counter the USA’s first volley in a brewing trade war. 

Minister of Trade, Industry, and Competition Parks Tau has announced that SA will urgently seek a meeting with the Trump administration over its decision to impose a 25 percent tariff on automobile imports - a move that could significantly impact South Africa's automotive sector.

The US is South Africa’s second-largest trading partner and the fifth-largest market for its vehicle exports, with exports of vehicles and parts exceeding $2 billion (R37.05 billion.)

The Trump administration confirmed last week that it plans to impose a 25 percent tariff on all cars and car parts entering the US. 

The tariffs are scheduled to take effect on 2 April 2025 and will apply to countries benefiting from the African Growth and Opportunity Act (AGOA).

Introduced in 2000, AGOA grants duty-free access to more than 1 800 products from eligible sub-Saharan African countries.

As tensions between the two countries continue to rise, experts have warned that if South Africa is excluded from AGOA, it could result in thousands of job losses, particularly in the agricultural and manufacturing sectors.

In a media statement issued this week, Tau expressed concern over the US decision to impose tariffs. 

He pointed out that South Africa’s automobile exports account for just 0.99% of total U.S. automobile imports and 0.27% of auto parts, emphasising that these figures do not pose a threat to the US industry.

Tau said: “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.”

“South Africa’s exports of automobiles account for only 0.99% of US total automobile imports and 0.27% of auto parts and thus do not constitute a threat to US industry.”

The minister further added that the country would seek a meeting with US authorities to “discuss these developments, given potential negative effect on the South African economy.”

He added: “The Department will also engage the automotive industry to discuss implications of these developments.”