21-05-2025
SA auto component manufacturers roll back production after crippling Trump tariffs
South African automotive component manufacturers are scaling down production in the face of sky-high tariffs imposed by US President Donald Trump, the National Association of Automotive Component and Allied Manufacturers said on Tuesday ahead of President Cyril Ramaphosa's crucial meeting with Trump.
The CEO of the National Association of Automotive Component and Allied Manufacturers (Nacaam), Renai Moothilal, said they were extremely concerned that automotive component manufacturing in SA had slowed down significantly since the imposition of tariffs on South Africa by US President Donald Trump earlier this year.
It is unclear at this stage how the 30% tariff base rate imposed on South Africa would relate to the generic 25% tariffs on foreign cars and parts. If it is more than 25%, South African automotive and component manufacturers will face an even bigger cost disadvantage than other countries.
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Moothilal said Nacaam members that exported to the US were continuing to service those contracts.
'It will typically take nothing less than 12 months for such safety-critical parts to be substituted. The concern has come in where we have seen local component manufacturers who have products going into the US, already starting to reduce production. That impacts the entire supplier base, not just those exporting,' he said.
The Department of Trade, Industry and Competition had been very proactive and regularly engaged with Naacam to help develop positions and info packs to aid those responsible for negotiating reduced tariffs, he said.
'A key point is that in the component tariff lines, the US holds a trade surplus relative to South Africa.'
He said the priority for component manufacturers would be to find a way to stabilise the political relationship with the US and seek a mutually beneficial arrangement that preserved South Africa as a preferred exporter into the US.
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'Not just short term, but to some extent look for a continuation of Agoa [the African Growth and Opportunity Act], which has proven to benefit South Africa, wider African markets and jobs in the USA as well.
'There are a multitude of component investors from the USA located in SA, and we would not want to see a situation where this changes,' he added.
President Cyril Ramaphosa is due to meet Trump at the White House in Washington on Wednesday, 21 May.
He will be accompanied by International Relations and Cooperation Minister Ronald Lamola, Minister in the Presidency Khumbudzo Ntshavheni, Trade, Industry and Competition Minister Parks Tau, Agriculture Minister John Steenhuisen and Special Envoy to the US Mcebisi Jonas.
Last week, Mikel Mabasa from Naamsa | The Automotive Business Council, said: 'Unlike past crises, the long-term implications of these tariffs are unclear, complicating production planning and investment decisions that typically stretch years ahead.
'Trade agreements remain essential for South Africa as they create a framework that facilitates smoother, more cost-effective and competitive trade between countries.' DM
