One of South Africa’s biggest beneficiaries of duty-free access to the American market under the African Growth and Opportunity Act (Agoa) will have to wait until next Thursday to hear if any locally made automotive parts and fully-assembled vehicles will also be subjected to the imposition of stiff US tariffs.
This is after US President Donald Trump announced on March 26 that the United States would impose a 25% tariff on imported automobiles and certain automobile parts.
The tariffs are set to take effect at 12 noon on April 3, US East Coast time.
Affected items include passenger vehicles such as sedans, SUVs, crossovers, minivans, cargo vans and light trucks, as well as key automobile parts like engines, transmissions, powertrain parts and electrical components.
The Trump administration stated that these measures aimed to bolster domestic manufacturing and were expected to generate approximately $100 billion in tax revenue, despite US industry analysts warning that the tariffs could lead to significant increases in vehicle prices for American consumers, potentially adding thousands of dollars to the cost of imported cars.
The Automotive Business Council (Naamsa) has said it’s not clear if the automotive tariff, primarily aimed at European and Asian car part exports to the US, will include South Africa’s duty-free benefits under Agoa.
Naamsa said it was constantly talking to its membership, but that the current scenario was a wait-and-see situation.
The National Association of Automotive Component and Allied Manufacturers echoed this sentiment, saying through its CEO, Renai Moothilal, that the local automotive industry would have to sit tight until April 3.
He told BDLive that he was “deeply concerned” about the potential impact on the local manufacturing industry should Trump tariffs also be instituted on South African automotive exports.
In 2023, South Africa exported approximately $1.6bn worth of fully assembled vehicles to the US.
Additionally, duty-free exports of automotive parts and accessories were valued at around $62 million in 2022.
A significant portion of these exports benefited from Agoa.
Since 2000, South Africa has exported approximately $22.5bn worth of motor vehicles to the US under Agoa, accounting for over 99% of its automotive exports in this category during that period. – Eugene Goddard, including various sources.
