South Africa plans US meeting on looming auto tariffs

South Africa plans to meet with U.S. authorities about auto tariffs. Trade Minister Parks Tau announced this on Tuesday. The tariffs are a concern due to South Africa's trade status with the U.S.

South Africa exports over $2 billion in vehicles and parts to the U.S. A proposed 25% tariff on these imports could significantly impact the country. This plan was revealed by U.S. President Donald Trump last week.

Tau stated that the U.S. Section 232 tariffs may affect imports from countries like South Africa. These countries benefit from the African Growth and Opportunity Act (AGOA). AGOA allows duty-free access for many products, including cars and parts, from eligible African nations.

In 2024, automobile exports made up 64% of South Africa's AGOA exports. This makes them a crucial part of products benefiting from this program, according to Tau.

While South African car exports are duty-free under AGOA, U.S. imports into South Africa also receive rebates. These rebates come from the Automotive Production Development Programme in South Africa.

South African automobile exports represent only 0.99% of total U.S. vehicle imports and 0.27% of auto parts imports. Tau emphasized that they do not threaten the U.S. industry.

Tau mentioned that South Africa will seek discussions with U.S. authorities about these tariffs' potential negative effects on its economy.

NAAMSA, representing South Africa's automotive industry, is assessing the impact of these tariffs. They are engaging with members and stakeholders regarding this issue.

Brands like Mercedes-Benz and BMW export cars from South Africa to the U.S. Renai Moothilal, CEO of an automotive association, said they await clarity on which components will be affected by these tariffs.

Moothilal warned that short-term effects might include consumer inflation for auto products in the U.S. He added that losing duty-free access could hurt local component companies' competitiveness in the long run.