The recent imposition of a 30% tariff on South African imports by the U.S. administration is poised to have significant repercussions on South Africa’s economy, particularly concerning employment and economic growth.
Impact on Employment:
The automotive sector, a cornerstone of South Africa’s manufacturing industry, is especially vulnerable. In 2024, the nation exported vehicles and parts valued at approximately $2.4 billion to the United States. These exports benefited from duty-free access under the African Growth and Opportunity Act (AGOA). The newly imposed tariffs are expected to erode this preferential status, potentially leading to reduced exports. This decline could adversely affect the sector, which contributes over 5% to the national GDP and employs more than 116,000 individuals.
Impact on Economic Growth:
Economists project that these tariffs could hit hard at South Africa’s economy, potentially reducing economic growth by up to 0.3 percentage points. This concern arises from the anticipated negative impact on key industries and overall economic performance.
In response, South Africa’s Department of Trade, Industry and Competition has expressed intentions to engage in discussions with U.S. authorities to address these concerns. The objective is to negotiate terms that could mitigate the adverse effects on the nation’s economy and workforce.
The South African Chamber of Commerce in the USA (SACCUSA) will continue to monitor the situation closely and provide timely updates to its members as more information becomes available.
