US President Donald Trump has signed a proclamation implementing a 25% tariff on imported vehicles, a move he says is aimed at protecting the domestic automotive industry.
Trump imposes 25% car tariff that rocks the global automotive industry
The announcement was made Wednesday and sent shockwaves through global financial markets, causing a sharp dip in automotive stocks, including a 6% decline in Tesla shares.
The tariff, set to take effect in April, targets both vehicles and parts brought into the US from overseas, regardless of whether they are assembled abroad or sourced from international supply chains.
While Trump argues the measure will bolster US manufacturing and reduce reliance on what he termed a “ridiculous” supply chain, critics argue it could lead to increased prices for American consumers and further strain global trade relationships.
“This is permanent,” Trump said, referring to the proclamation.
“We’ll effectively be charging a 25% tariff,” adding that the policy could generate up to $100 billion in annual revenue.
The tariff comes amid broader geopolitical tensions and has already spurred warnings from the European Union and Canada, with Trump vowing higher retaliatory tariffs if they respond collectively.
South Africa’s automotive industry wants Ramaphosa to tariff our minerals
The tariff announcement has prompted strong reaction from South Africa’s automotive sector.
According to reports, the CEO of the Automotive Business Council, Mikel Mabasa, said the move will negatively affect South African car exports and warned that American consumers will ultimately bear the cost.
“Those citizens in the US seeking to buy a certain vehicle will now have to pay more,” Mabasa stated.
“It is the citizens who are going to be taking that additional tariff, not necessarily the companies that are importing into those particular markets.”
South Africa, a key exporter of vehicles and auto components, could see its exports hit by the tariff.
Mabasa confirmed that the industry is preparing to lobby President Cyril Ramaphosa to impose counter-tariffs, particularly targeting US access to South African minerals used in automotive manufacturing, such as platinum and manganese.
“We will obviously lobby and appeal to our government… to reciprocate in kind,” Mabasa said.
“We need to make sure that the minerals we send to the US are not exempt from similar, if not higher, tariffs.”
The industry’s call for a retaliatory response is yet another indication of growing concerns that the US policy shift could distort global automotive trade and further escalate tensions with major trading partners.
South Africa’s government has yet to issue an official response to the announcement.