South African car exports to the United States have fallen dramatically. This sharp decline follows new trade tariffs imposed by President Donald Trump. The automotive industry now faces a deepening economic crisis.
Exports plummeted more than 80% in April and May. This decline comes despite decades of duty-free trade. The U.S. has long been a key destination for South African-made vehicles.
The industry group Naamsa called this a socio-economic crisis in the making. Thousands of jobs are threatened by the new trade tariffs. Vibrant industrial hubs could potentially transform into ghost towns.
The new 25% duty on cars has been in effect since April. An additional 30% rate is slated to begin this August. The trade offensive by the United States is now escalating.
The automotive sector is critical for South Africa’s economy. It accounted for 64% of all AGOA trade with the U.S. last year. This vital export revenue is now at severe risk.
Automakers must now absorb rising costs to maintain their market access. This mounting pressure could force companies to scale back production. Future investments and expansion plans are also in jeopardy.
Diversifying export markets is a critical solution for the industry. However, this complex process cannot happen overnight. Global competitors are already entering traditional South African markets.