Deputy President Paul Mashatile has announced that President Cyril Ramaphosa will send a delegation to the White House to discuss trade tariffs with United States President Donald Trump’s administration.
Mashatile said the recently announced tariffs could disrupt trade flows and undermine the global competitiveness of the local automotive sector.
As of 8 August 2025, a 30% tariff on all South African goods entering the United States is now in effect.
Keynote address
“We will continue engaging with the USA to identify practical solutions. The President will be sending the delegation once again to the White House to engage with the US administration on this matter,” he said.
The country’s second-in-command delivered a keynote address at the National Association of Automotive Component and Allied Manufacturers (NAACAM) Show 2025, a premier forum showcasing the capabilities of the domestic automotive component manufacturing sector in Gqeberha, Eastern Cape.
The Deputy President touched on the importance of the African Continental Free Trade Area (AfCFTA) agreement on economic integration and industrialisation, which is projected to draw additional international investment into the African automotive industry.
Creating a single continental market for goods and services could potentially lead to increased trade, investment, and job creation within Africa.
“However, this does not suggest that we do not need other nations as trading partners. We believe in diversifying our investments and engaging in trade with several partners.”
Economic interests
The Deputy President said Cabinet is committed to protecting the economic interests of the country and is forging ahead toward strengthening the economy and dealing with the triple challenges of unemployment, poverty, and inequality.
“I must highlight that there will be repercussions felt throughout the entire value chain if we do not reach an amicable trade agreement with the White House.”
He said it was likely that South African suppliers supporting domestic original equipment manufacturers (OEMs) exporting automobiles or integrated systems to the United States will face volume reductions.
“This will put pressure on production planning, employment decisions, and investment choices.”
In addition, the South African automobiles and components would see a direct rise in the landed cost in the United States market.
“Because of this, they would be unable to compete with goods from nations that have continued preferential or zero-duty access, such as those in the USMCA (United States, Mexico, Canada Agreement).
“Overall, the imposed tariffs threaten to disrupt well-established trade flows and weaken the global competitiveness of South Africa’s automotive manufacturing ecosystem.”
Remains steadfast
However, the Deputy President believes South Africa remains resilient and steadfast in its efforts to grow and protect the economy.
He called for collaboration between the government and the private sector to address the growing dependence on imports, infrastructural inadequacies, the transition to electric vehicles (EVs), and the issue of a 30% tariff increase.
He praised the NAACAM for investing a lot of resources in improving the localisation, transformation, and supplier development landscape in South Africa.
The automotive industry holds significant potential for shared prosperity through targeted industrial development. The sector plays a crucial role in the gross domestic product (GDP) and employment of the country.
It is one of the most strategically important and internationally linked industries, accounting for 22.6% of manufacturing output and contributing 5.2% to the nation’s GDP.
The automotive sector employs around 115 000 people in total, with over 80 000 of these employees working in the component sector. In 2024, the component sector exported R62.5 billion of components.
‘Concern’
“We must never allow the loss of these gains because of external and internal pressures. I say this with concern because the employment levels in the sector have been under strain due to ongoing economic pressures and reduced production volumes.”
In the past two years, NAACAM has reported the closure of 12 companies, affecting over 4 000 people.
The Deputy President believes that the latest unemployment figures are an indication that the nation’s joblessness crisis remains an urgent concern.
“We need to do more to combat unemployment, which might include improving education and skills to match labour market demands, promoting entrepreneurship and small enterprises, and investing in public employment programs to generate jobs.”
He told delegates that government is committed to working with various sectors to create employment and improve the living conditions of the people.
“As the government, we recognise the industry’s significant role and see it as the backbone of our economic growth, promoting industrial development and encouraging innovation.”
Are you confident this delegation will have any more luck than the first one?
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