NATIONAL NEWS - The decision of President Donald Trump to impose 30% tariffs on the export of vehicles, components, tyres and parts exported from South Africa to the United States will kill any possible economic growth in our country.
According to Trump, the tariffs will be effective from the 1st of August 2025. He believes that South Africa exports more goods to the US than it buys from the country, making it an unfair trade relationship.
Dawie Roodt, Founder and Chief Economist of the Efficient Group, told MISA, the Motor Industry Staff Association, that Trump’s figures are not based on actual figures, but everyone will feel the impact because it will hinder any economic growth.
These tariffs take away any competitive edge that South Africa had, to compete with the global market. Small retailers have already stopped manufacturing because it will not be feasible to continue with the new export tariffs; or because of a reduced demand from US clients.
“We can now accept that AGOA (African Growth and Opportunity Act) is dead. Under AGOA, more than 1 800 South African products and goods, including vehicles, components and parts, were exported to the US duty-free,” says Roodt.
South Africa's official unemployment rate rose to 32,9% in the first quarter of 2025. This is the highest rate since the second quarter of 2024 (33,5%).
“The population has seen a steady increase year-on-year, with a growth rate of 1.33%. We live in a country where our population growth exceeds our economic growth. This makes job creation highly unlikely,” says Roodt.
Martlé Keyter, MISA’s Chief Executive Officer: Operations, says that the retail motor industry, in which MISA is the majority trade union, is already struggling amidst the uncertainty of tariff percentage increases which started when President Trump came into office earlier this year.
The Union is experiencing an increase in employers closing their doors, restructuring in terms of Section 189 of the Labour Relations Act or embarking on short time.
According to Tiekie Mocke, Manager of MISA’s Legal Department, the negative impact on exports forced an employer within the retail motor industry to cut a five-day workweek back to a four-day workweek, effectively leaving employees out of pocket with at least one week’s income per month.
This was done pro-actively to prevent retrenchments but cannot continue indefinitely.
Keyter says that President Cyril Ramaphosa and his delegation needs to do whatever it takes to restore South Africa’s strained relationship with the US. This is not about who is right or wrong, but about what is in the best interest of South Africa.
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