South Africa Considers Up to 50% Tariffs on Vehicles from China and India

South Africa is reviewing its tariff policy after a sharp rise in vehicle imports from China and India, prompting officials to weigh duties of up to 50% to protect local manufacturers, as per Bloomberg report. 

Import Share and Growth Trends 

In 2024, vehicles from China accounted for 53% of South Africa’s total vehicle imports while those from India made up 22%.  

Over the past 4 year, shipments from China have risen 368% and from India 135%, with the strongest competition in the entry level segment where lower priced models are eroding margins for domestic producers. 

Proposed Tariff Structure 

The Department of Trade, Industry and Competition is consulting on raising the duty on fully built passenger vehicles from the current 25% to the WTO bound rate of 50%.  

For component parts, the proposed levy ranges between 10% and 12% depending on the country of origin. Officials also mentioned possible excise duties on new luxury cars and a review of rebate credit certificates. 

Read More: Tata Group’s Defence Unit in Talks to Supply Military Hardware to Europe and Africa: Report! 

Implications for Domestic Manufacturers 

Higher import duties are intended to level the playing field for South African assemblers who have faced margin pressure as cheaper imports flood the market.  

By aligning duties with WTO most favoured nation concessions, the government aims to curb the influx while maintaining compliance with international trade rules. 

Policy Coordination and BRICS Context 

The tariff review will involve the National Treasury and may affect broader trade relations within the BRICS bloc, of which South Africa, China and India are members. Adjustments are expected to be presented to parliament after the internal assessment is completed. 

Conclusion 

South Africa is evaluating tariff increases of up to 50% on vehicles from China and India in response to rapid import growth that now represents a majority of its vehicle market. The proposed measures target both complete vehicles and key components, aiming to protect domestic production while adhering to WTO obligations. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.