‘Open our eyes and ears’ – Ramaphosa on how to tackle US tariff hike on SA cars

South Africa will feel the wrath of the Trump administration as it stands firm on implementing the 30% tariff on exports to the United States (US). Other countries will also be affected by President Donald Trump’s decision, as their export tariffs are increasing as well.

In South Africa, the automotive sector will be significantly impacted, as some brands, such as Mercedes-Benz, export to the US.

President Cyril Ramaphosa, speaking at the BMW plant in Rosslyn, Pretoria, on Thursday, highlighted that the automotive industry has a significant impact on the country’s GDP, as it contributes 4.9%.

ALSO READ: US tariff of 30% on SA exports: where to now?

Ramaphosa on US tariffs

BMW Group SA hosted an engagement to highlight its commitment to strengthening South Africa’s economic vitality and advancing its industrial innovation.

“The tariffs from the US have turned the world upside down and are a huge threat to us as well because we export a lot of products to the US, such as vehicles, agricultural products and mineral products,” said Ramaphosa.

During his keynote address, he added that SA is the 22nd largest car exporter in the world. Ramaphosa added that the US market is important to SA; however, it is time to diversify the country’s export base and accelerate domestic value creation.

“As we face this threat of higher tariffs, we need to open our eyes and ears and see where else our vehicles can go.”

SA government engaging on US tariffs

Ramaphosa added that producers of some industries have already felt the pressure of the incoming US tariffs. He said the South African government is engaging with the US, and he hopes this will yield success in the coming days.

“We need to look at other markets, and being an African country, with an African continental free-trade, we have got to see how we open up the rest of the continent, because we have a very positive tariff-free opportunity with the rest.”

He applauded BMW for exporting the new X3 to Europe. He said that exporting cars to other countries demonstrates trust in the skills South Africans possess and highlights the industry’s potential.  

ALSO READ: Devastating impact of US tariffs on SA automotive sector even before implementation

BMW not affected by tariffs

Danny Bester, BWM plant director, told The Citizen that they are not affected by the US tariffs, as they are not currently exporting to the country.

“Right now, we are not affected by the US tariffs because most of our volumes are going to other parts of the world, like Europe, Australia and New Zealand.”

He added that they would like to have access to the American market. However, they have sent 16% of the current generation to the US.

When asked if they will be looking into expanding in the future, Bester said BMW is aiming to build a new record volume by the end of the year.

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