MINISTER TAU NOTES WITH CONCERN USA’S DECISION TO IMPOSE A 25% TARIFF ON IMPORTS OF AUTOMOBILES

The Minister of Trade, Industry, and Competition (the DTIC), Mr. Parks Tau, has noted with concern the decision by the United States to impose a 25% tariff on imports of automobiles and certain automobile parts to address what the US perceives a threat to its national security under Section 232 of the US Trade Expansion Act of 1962.

As per the Executive Order, the duties will apply to all countries including those with free trade agreement with the United States, with exemption of countries party to the United States-Mexico-Canada Free Trade Agreement. The implementation dates are 3 April 2025 for automobiles and not later than 3 May 2025 for automobile parts.

Previous Section 232 tariffs applied to foreign imports of steel and aluminium nullified the preferences that Sub-Saharan Africa countries enjoyed under the Africa Growth and Opportunity Act (AGOA). It is therefore expected that the Section 232 tariffs on automobiles and automobile parts will also apply to imports of these products from AGOA beneficiary countries, including South Africa.

Automobile exports from South Africa accounted for 64% of South Africa’s exports under AGOA in 2024 and are therefore a significant component of products currently benefiting under the preferential programme. South Africa’s exports of automobiles accounts for only 0.99% of US total automobile imports and 0.27% of auto parts and thus do not constitute a threat to US industry.

United States imports of automotive and automotive parts from South Africa was estimated at just over US$2 billion (US$2,384, 439, 626); while US exports to South Africa was over US$1.1 billion (US$1,162,142,8792) in 2024. While South Africa’s exports to the United States goes duty-free under AGOA; US imports into the South Africa also enjoy rebates under the Automotive Production Development Programme.

South Africa will seek a meeting with the United States authorities to discuss these developments, given potential negative effect on the South African economy. The Department will also engage the automotive industry to discuss implications of these development.