Trump slaps 25% import tariff on vehicles, car parts coming into US
The proclamation was signed by Trump on Wednesday, adding to a flurry of tariffs imposed on allies and foes alike.
US President Donald Trump signs an executive order in the Oval Office of the White House in Washington, DC, on January 20, 2025. Picture: Jim Watson/AFP
JOHANNESBURG - US President Donald Trump has slapped a hefty 25% import tariff on vehicles and car parts coming into that country from global trade partners.
The proclamation was signed by Trump on Wednesday, adding to a flurry of tariffs imposed on allies and foes alike.
Since the 78-year-old’s return to office in January, geopolitical tensions have been strained amid US protectionism, which has reignited trade wars.
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In the latest proclamation, Trump referred to a 2019 report from the secretary of commerce on an investigation into auto imports.
The report found "that automobiles and certain automobile parts are being imported into the United States in such quantities and under such circumstances that threaten to impair the national security of the US".
This was followed by an attempt to address with the European Union, Japan, and any others.
Without any solution, Trump said the national security concerns remained and had since escalated, adding the US' domestic industrial base had been compromised by the growing foreign automotive industries.
"The COVID-19 pandemic exposed critical vulnerabilities and choke points in global supply chains, undermining our ability to maintain a resilient domestic industrial base. In recent years, American-owned automotive manufacturers have experienced numerous supply chain challenges, including material and parts input shortages, labour shortages and strikes, and electrical-component shortages. Meanwhile, foreign automotive industries, propelled by unfair subsidies and aggressive industrial policies, have grown substantially."
Mexico is the top supplier of cars to the US, followed by South Korea, Japan, Canada and Germany.
Although at a smaller scale, some African countries could be impacted by the tariffs which take effect on 2 April.
US legislation which gives eligible countries duty-free access to the US market, AGOA, forms one of the cornerstones of African automotive sector exports to the United States.
Automotive sector production and exports form part of a capital-intensive industry, and currently virtually all exports from this sector are exported from South Africa.
According to data from the Observatory of Economic Complexity, in 2023, South Africa exported $13bn to United States. The main products that South Africa exported to the United States were platinum ($3.42bn), cars ($1.6bn), and other precious metal products ($1.37bn).
Kenya and Nigeria also export very small amounts of automotive products to the US.
While South Africa's participation in AGOA remains in question, Trump said there was still room for exporters to benefit from preferential tariff treatment.
"For automobiles that qualify for preferential tariff treatment under the USMCA, importers of such automobiles may submit documentation to the secretary identifying the amount of US content in each model imported into the United States. "US content" refers to the value of the automobile attributable to parts wholly obtained, produced entirely, or substantially transformed in the United States. Thereafter, the secretary may approve imports of such automobiles to be eligible to apply the ad valorem tariff of 25 percent in clause (1) of this proclamation exclusively to the value of the non-US content of the automobile. The non-US content of the automobile shall be calculated by subtracting the value of the US content in an automobile from the total value of the automobile."