SA Govt Warns of Economic Fallout if US Trade Deal Collapses

 South Africa’s Deputy President Paul Mashatile cautioned that failure to secure a trade agreement with the United States could trigger severe economic consequences for the country’s automotive industry, one of its most critical economic sectors.

Addressing at the opening of the P20 Women’s Parliament in Cape Town , Mashatile, according to IOL warned that a proposed 30 percent tariff on South African automotive exports to the US would disrupt established trade flows, erode competitiveness, and jeopardise thousands of jobs.

“We 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,” Mashatile said.

He explained that suppliers supporting domestic original equipment manufacturers (OEMs) exporting to the US would likely face production cuts, which would undermine investment, strain planning, and lead to job losses.

 By contrast, competitors from countries with preferential or zero-duty access under agreements such as the USMCA would retain a competitive advantage.

The warning comes as South Africa presides over the G20 under the theme “Solidarity, Equality, Sustainability.” Mashatile stressed that the automotive sector—deeply integrated into global supply chains—must be central to discussions on economic resilience, sustainability, and governance reform.

Addressing stakeholders at a forum organised by the National Association of Automotive Component and Allied Manufacturers (NAACAM), Mashatile underscored the sector’s economic weight.

"The industry contributes 22.6 percent of South Africa’s manufacturing output, 5.2 percent of GDP, and employs more than 115,000 people, including 80,000 in the component manufacturing segment.

“The automotive industry holds significant potential for shared prosperity through targeted industrial development,” he said, praising NAACAM’s efforts in localisation and transformation.