The Nelson Mandela Bay Business Chamber says the Eastern Cape is likely to be disproportionately affected by US President Donald Trump compared to the rest of the country, given the extent to which the automotive and agriculture sectors anchor the local economy.
Chamber CEO Denise van Huysteen says speed and a proactive strategic response are required to enable South African-based manufacturers and producers to find alternative solutions to navigate the fast-changing landscape and implement mitigation actions.
Responding to the Trump tariff announcements on Thursday, she said the Chamber was deeply concerned about the impact the 25% tariffs the US has imposed on foreign-made cars and parts may have on the local automotive ecosystem.
"While it is still too soon to comment on the extent these tariffs may have upon our local automotive manufacturing sector, it appears that this new Section 232 tariff will immediately supersede the duty-free benefits which the industry has up until now benefitted from under AGOA.
She said, "Our local economy is highly reliant on the automotive industry and employs almost half of the country’s workforce in this sector."
Van Huysteen is particularly concerned about the potential knock-on impact that reduced vehicle assembly volumes of affected OEMs who export to the US may have on the automotive components supply chain. During 2024, over 20,000 vehicles were exported from South Africa to the US. In 2023, automotive exports to the US were valued at R20.1 billion, and components were valued at R7.8 billion.
"These tariffs will be highly disruptive to the industry around the globe, especially since automotive manufacturing relies on long investment cycles, and will not be able to quickly shift sourcing decisions to avoid the tariffs. This could drive up costs for both consumers and automotive manufacturers," she added.
The Eastern Cape is the second-largest citrus-producing province in the country, with Sunday’s River Valley serving as the largest single production area.
Van Huysteen says that while 9% of South Africa’s citrus exports go to the United States, it is unclear how the tariffs will affect the local citrus industry at this stage.
"As it is now the start of the new citrus season, it will surely create a lot of uncertainty," she added.
"Other potential issues which may arise include other countries potentially reducing their tariffs to appease the US and SA exporters having to also compete with these tariffs; and the dumping of products in our market by other countries which can no longer compete in the US," Van Huysteen said.
