One way South Africa could sidestep new US tariffs on locally made cars

Auto industry veteran Kriben Reddy has urged government to look for new markets for the country’s automotive exports to reduce the impact of new tariffs announced by United States (US) President Donald Trump this week.

The new tariffs stand to do lasting damage to South Africa’s automotive sector as approximately 64% of the goods the country exports to the US under the African Growth and Opportunity Act comprise cars and automotive components.

The vehicles include the BMW X3 built in Rosslyn, Gauteng, as well as the Mercedes-Benz C-Class assembled in East London, Eastern Cape.

South Africa is also the largest producer of catalytic converters globally, a good portion of which are earmarked for the US.

Reddy told SABC News that the effects of the new US tariffs could be minimised in several ways.

He said that South Africa could look at hiking tariffs for other trading partners to make deals more “lucrative.”

Additionally, he said that due to the country’s extensive infrastructure for automotive manufacturing, it is “primed to be competitive in other export markets.”

He referred to countries such as China and India, whose volumes have surpassed most all major vehicle export economies in recent years including the US by focusing their attention on markets in Africa, Asia, the Middle East, and Latin America.

Government believes there’s hope

The Department of Trade, Industry, and Competition (DTIC) said it will seek an audience with the US presidency to discuss the new tariffs and the potential consequences they could have on the domestic vehicle sector.

Fears exist that, should demand for locally made cars drop, it could lead to job losses and the diversion of future investments by major automakers.

“We do believe that through proper engagement and making each other understand, and also persuading each other, that the USA and South Africa will be able to find some solutions,” said DTIC spokesperson Yamkela Fanisi.

“We feel like this is a significant part of our trade with the USA and, therefore, there’s room for us to have an engagement and making each other understand the value that this trade relationship brings to us.”

While the DTIC believes there’s hope still, it remains unclear whether it will get an appointment with Trump’s confidants amid the souring relationship between South Africa and the world’s largest economy.