South Africa eyes new export markets to offset US car tariff impact

South Africa’s automotive industry is bracing for the impact of new tariffs imposed by the United States. This week, President Donald Trump announced tariffs that could severely affect the local auto sector, which relies heavily on exports to the US. The tariffs could deal a lasting blow to an industry that sends approximately 64% of its exports to America, primarily comprising cars and automotive components.

The new tariffs target key vehicles like the BMW X3, built in Rosslyn, Gauteng, and the Mercedes-Benz C-Class, assembled in East London, Eastern Cape. South Africa is also the world’s largest producer of catalytic converters, many of which are destined for the US. As a result, these new trade barriers could disrupt a vital portion of the country’s export economy.

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Kriben Reddy, an automotive industry veteran, suggests that the government must pivot to new markets to protect South Africa’s automotive exports. Reddy points to China and India as successful examples, where these countries have focused their efforts on African, Asian, Middle Eastern, and Latin American markets, allowing them to surpass the US in automotive exports. “South Africa has the infrastructure to be competitive in other export markets,” Reddy stated. “This is a time to diversify, rather than rely solely on the US.”

Despite the setback, there is hope that government intervention could mitigate the negative effects. The Department of Trade, Industry, and Competition (DTIC) has expressed its intention to engage with the US administration to address the tariffs. DTIC spokesperson Yamkela Fanisi explained, “We believe that through proper engagement, we can make each other understand the value this trade relationship brings to both countries.”

However, there is uncertainty surrounding these negotiations. With tensions between South Africa and the US, it remains unclear whether the DTIC will secure a meeting with US officials to discuss the matter further. The risk of job losses and reduced investment in the automotive sector is real, as the US tariffs may prompt a decline in demand for locally manufactured vehicles.