Parks Tau plans US meeting to address Agoa tariff threat

SA will seek a meeting with US authorities on car tariffs, trade minister Parks Tau said on Tuesday, noting the levies are a concern as the country has preferential trade status with the US.

SA, whose exports of vehicles and parts into the US are estimated at more than $2bn (R37.05bn), could be hard hit by a planned tariff of 25% on car imports US President Donald Trump made public last week.

Tau said the US Section 232 tariffs were expected to apply to imports of cars and car parts from countries, including SA, that benefited from the US African Growth and Opportunity Act (Agoa).

Agoa provides duty-free access to the US market for most agricultural and manufactured products, such as cars and parts exported by eligible African countries.

“Automobile exports from SA accounted for 64% of exports under Agoa in 2024 and are therefore a significant component of products benefiting under the preferential programme,” Tau said.

While SA’s car exports to the US are duty-free under Agoa, US imports into SA also receive rebates under the country’s Automotive Production Development Programme.

SA’s exports of cars accounted for only 0.99% of US total vehicle imports and 0.27% of car parts “and thus do not constitute a threat to US industry”, Tau said.

“SA will seek a meeting with US authorities to discuss the developments, given the potential negative effect on the economy,” he said.

The representative body of the automotive industry, Naamsa, has said it was actively assessing the potential effect of the tariffs and was engaging with its members and other stakeholders.

Among the car brands SA exports to the US are Mercedes-Benz and BMW.

National Association of Automotive Component and Allied Manufacturers CEO Renai Moothilal said the association would await further clarity on the full list of components covered by the proclamation.

“In the short term, it’s possible the result is consumer inflation for auto products in the US,” Moothilal said.

The removal of duty-free access “over the long term will hurt the competitiveness of local component companies who need the scale brought upon by being able to trade freely into the US market”, he said.

Reuters