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Trade Trends News
2025-07-21
South Africa’s auto exports to the United States dropped sharply in the first quarter of 2025, with declines of over 80% in both April and May, according to the National Association of Automobile Manufacturers of South Africa (naamsa). The decline is attributed to U.S. President Donald Trump's import tariffs, which have severely impacted car manufacturers’ sales.
The United States is South Africa’s second-largest trading partner and a key destination for South African auto exports. For years, South African vehicles have benefited from duty-free access under the African Growth and Opportunity Act (AGOA).
India’s National Automobile Board also reported a steep decline in its own auto exports to the U.S., with a 73% year-over-year drop in Q1. In April, exports fell by 80%, and in May, by 85%.
The sharp downward trend in auto exports shows no sign of reversing anytime soon, the industry body warned.
"This is more than just a trade issue—it’s an emerging socio-economic crisis," said naamsa CEO Mikel Mabasa.
Trump escalated his global trade offensive in July, building on tariff hikes introduced in April. He announced new duties on imports from over a dozen countries, including South Africa. Starting August 1, South African vehicles will face a 30% import tariff, directly threatening the viability of auto exports to the U.S.
This marks a departure from the previous 25% tariff on vehicles introduced in April. Since May, the tariff has also been extended to include auto parts, further increasing pressure on South African auto exports.
Before Trump’s July announcement, South Africa had proposed a trade package that included a duty-free quota for 40,000 vehicles per year exported to the U.S., along with tariff exemptions for locally sourced auto components produced within the United States.
According to the Automotive Industry Export Council of South Africa, by 2024 the country’s auto exports made up 64% of all AGOA-based trade with the U.S., generating ZAR 28.6 billion (USD 1.6 billion) in export revenue.
Mabasa warned that the tariffs threaten thousands of jobs and could devastate local economies that rely heavily on auto exports, such as East London, a coastal city where the automotive industry is the cornerstone of the local economy.
“If we lose export markets like the United States, we risk turning vibrant industrial hubs into ghost towns,” Mabasa said, cautioning that the effects would ripple across the entire auto exports supply chain—from component manufacturers to logistics providers.
He added that while diversifying auto exports is essential, it cannot happen overnight—especially as global competitors are already shifting their exports into markets traditionally served by South Africa.
Mabasa further noted that this growing pressure will force South African automakers that export to the U.S.—including Mercedes-Benz (MBGn.DE)—to absorb rising costs, cut back on production, and reevaluate future investments in auto exports.
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