Why Donald Trump's 30% tariff on SA exports could sink the local boat building industry
It turns out though, that one of South Africa's big exports is also boats.
There's a growing boat industry centred around the Western Cape, where boats and other vessels are manufactured at much cheaper prices than our competitors.
But with the Trump administration slapping further tariffs on South African exports, the boat manufacturing sector in South Africa could be in trouble.
Trump's 30% tariff on South African exports is due to come into effect on 1 August.
Speaking to Stephen Grootes on The Money Show, Vanessa Davidson, executive head at the SA Boat Builders Exporters Export Council says a 30% tariff would be significantly impactful on the sector.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
4 hours ago
- The Star
South Africa Is No Longer Alone on the International Stage
Vashna Jagannath | Published 1 week ago South Africa's position on the human catastrophe in Gaza has been consistent, lawful and morally serious. It has insisted that international law must be applied equally to all countries, regardless of their power or alliances. This has included the referral of Israel to the International Court of Justice (ICJ) on charges of genocide. While Pretoria has won international respect in many quarters, the price has been steep. It has come under immense pressure from the United States, in particular the Trump-aligned right, as well as from domestic organisations and figures closely aligned with the West. In this context the formation of the Hague Group—a bloc of states committed to defending international law and ending impunity—marks a development of considerable significance. The group was convened by the Progressive International and launched on 31 January 2025. It is chaired by Colombia and South Africa, with current members also including Bolivia, Cuba, Honduras, Malaysia, Namibia, and Senegal. The coalition—spanning Latin America, Africa, Asia and the Caribbean—pledged to support ICJ and International Criminal Court (ICC) rulings, prevent arms transfers to Israel, bar military fuel shipments, and pursue legal accountability for violations in Gaza. Western governments have long invoked the language of a 'rules-based international order'—sometimes in strident moral terms—to justify their global domination. But this order has often served to shield the West and its allies from legal scrutiny while imposing strictures on others. The 2003 invasion of Iraq by the United States was a clear violation of international law. The NATO-led regime change intervention in Libya in 2011 was also unlawful. In Afghanistan, elements of the two-decade occupation—including targeted killings and drone strikes—breached international humanitarian law. Israel's bombing campaigns in Syria and Yemen, sometimes backed or tacitly accepted by the West, included strikes on civilian infrastructure and violations of territorial sovereignty and have been deemed unlawful by UN experts and legal assessments. In each case, a supposedly rules-based order yielded to the impunity of powerful Western states. Until now, the idea of international law as a universal normative system has been more aspiration than reality. The United States has not ratified the Rome Statute and has actively resisted ICC investigations, including imposing sanctions during the probe into alleged U.S. war crimes in Afghanistan. Israel remains outside the court's jurisdiction. The ICJ—though central to the UN system—continues to be undermined: the U.S. withdrew from its compulsory jurisdiction in 1986 after being found to have violated international law in Nicaragua. South Africa's decision to bring the genocide case against Israel before the ICJ was bold and principled. Though the Court's final ruling is pending, provisional measures have already instructed Israel to prevent genocidal acts and allow humanitarian aid. That legal action made South Africa a target. In the US the Biden administration expressed concern, but pressure escalated dramatically when Donald Trump returned to the Presidency. This is one reason among many why the Hague Group matters. By aligning with other states in defence of international law, South Africa has built a collective bloc. This bloc's cohesion offers protection as well as enhancing the aim of defending international law. Francesca Albanese, the UN Special Rapporteur on the Occupied Palestinian Territories, argues that the Hague Group provides 'a global push for collective action through international law—no arms for genocide, no aid for occupation, and no tolerance for apartheid.' In her view, the initiative not only exemplifies states meeting their legal obligations but also challenges the exceptionalism that shields powerful states from accountability. She has argued that the Group's efforts 'must become a global initiative' if the integrity of international law is to be affirmed. The next milestone for the Group is the Emergency Conference co-hosted by South Africa and Colombia and set for 15–16 July 2025 in Bogotá. This gathering will include many non-member states—though not all are expected to formally join the Group—and focus on enforcing ICJ rulings, halting ongoing violations, and affirming Palestinian self-determination. Delegates are expected to announce coordinated legal and diplomatic measures. South Africa's response to the crisis in Palestine has helped restore some of the international moral standing lost during the Zuma years. At home, it has given some citizens hope that an ethical core still exists within the ANC and government, and could extend to other pressing issues at home and abroad. Perhaps this is why the legal team were greeted at the airport with the kind of warmth and pride usually reserved for triumphant sports teams when they returned from the ICJ. It was a moment that revealed a deep public hunger for moral seriousness and national purpose. Tellingly, the approach to the ICJ won strong support from mass-based organisations such as the National Union of Metalworkers (NUMSA) and Abahlali baseMjondolo, which are usually intensely critical of the ANC. In the West there is a clear shift, especially among young people, from uncritical support for Israel. Nonetheless, governments in countries like Germany and the United Kingdom, along with the US of course, continue to back Israel's unlawful actions in Gaza, as well as Yemen, Syria, Lebanon and Iran. In this context where support for change still confronts powerful opposition the Hague Group is a significant collective challenge to the impunity of powerful Western states. The era in which Western exceptionalism defined the limits of legal accountability is being directly contested . Whether this results in meaningful enforcement or another retreat into hypocrisy will depend not only on the Hague Group's resolve, but on whether other states are prepared to act on the principles they claim to uphold. * Dr Jagarnath sits on the council of the Progressive International. ** The views expressed do not necessarily reflect the views of IOL or Independent Media.
Daily Maverick
5 hours ago
- Daily Maverick
Can SA forge a new consensus at G20 summit?
For the second time this year, the world's most powerful finance ministers have gathered in South Africa, this time at the lush resort of Zimbali north of Durban. But one minister will once again be conspicuous by his absence: that from the US. Scott Bessent, the mercurial US Treasury Secretary, has once again skipped the G20, choosing instead to send Michael Kaplan, the acting undersecretary for international affairs at the US Treasury. It all started when Secretary of State Marco Rubio refused to participate due to the host's vision of this year's G20 presidency being about 'Solidarity, Equality and Sustainability' — principles the current US administration theatrically rejects. In one sense, the timing of this South African presidency of the G20 could not be worse. Faced with the anti-globalist, protectionist bent of the US, what is usually a processional opportunity for showcasing a nation's soft power and producing vacuous missives about global cooperation has become a near impossible job of managing diplomatic fallout. As the first country from Africa to host the G20, South Africa had hoped to push issues vital for the very developing nations that stand to lose the most from the US president's trade war. With US aid budgets cut to virtual non-existence, and with tariffs about to decimate the export industries that, until now, had been the only hope for small African developing countries to build some semblance of a manufacturing sector, South Africa now finds itself managing the wreckage of international consensus. The G20 is a relatively new arrival to the international global system of forums and talk shops. Established as a response to the global financial crisis in 2008, the whole point was for countries like the US, the UK and the EU to include the faster growing nations of the Global South, which were becoming increasingly critical to the global economy. That promise now looks increasingly hollow. US vs the world: SA salvages G20 How naïve and quaint that looks, from the perspective of the realpolitik of 2025. In addition to Trump's threat of crippling levies on key trading partners from 1 August 2025, the US president has taken aim at the BRICS bloc of emerging economies — which includes host nation South Africa — threatening an extra 10% tariff for 'anti-American' policies. South African President Cyril Ramaphosa, following the BRICS summit in Rio last week, was the first of the group to hit back. 'The president of the US must recognise that multiple centres of power now define the global landscape,' he said. Ramaphosa is still trying to convince Trump to attend a G20 leaders' summit in Johannesburg in November, where he is due to hand over the presidency of the group to the US. But hopes that Trump will support any of South Africa's G20 initiatives have largely been extinguished. Under fire from corruption scandals at home, Ramaphosa's efforts are increasingly looking to be in vain. The G20 international outreach also follows a highly publicised Oval Office dressing-down, where Trump repeated false claims about a so-called genocide against white South African farmers. Still, despite Washington's aggressions, South Africa has no option but to press ahead with this week's meetings, which culminate on Thursday and Friday with sessions led by finance ministers and central bank governors. South African Reserve Bank governor Lesetja Kganyago and Finance Minister Enoch Godongwana will, at least, be in the limelight as opposed to the embattled president. The EU is now in the firing line It is not only developing countries that have been targeted by Trump. On Saturday, the EU received a typically condescending letter from Trump, threatening blanket tariffs on European goods. In a message that appeared to be copied and pasted from the one sent to South Africa and countless other recipients, Trump invited the EU to 'participate in the extraordinary Economy of the United States, the Number One Market in the World', while warning of sweeping new levies. His parting line, as ever: 'Thank you for your attention to this matter!' The proposed 30% tariff rate, together with existing sectoral duties and an expected levy on critical goods, would take the increase in the US effective tariff rate on the EU to a brutal 26%. According to estimates from Goldman Sachs, if implemented and sustained, it would lower euro area GDP by 1.2% by the end of 2026. The US is the largest trade partner of the EU, with the sum of exports from the EU totalling $815-billion in 2024. The EU understands that such a trade restriction with its biggest partner is nothing short of an existential challenge. In response, the bloc is actively seeking to diversify its trade ties. Besides Canada and Japan, the bloc is now fast-tracking agreements with India and other Asia-Pacific nations. Speaking from Beijing, EU competition chief Teresa Ribera confirmed that discussions with India are expected to conclude by year's end. 'We need to explore how far, how deep we can go in the Pacific area with other countries.' Africa will undoubtedly be next. Can South Africa lead a G19 without the US? Where the tariff war ends is anyone's guess. But with the US — the architect of the post-war global order — now acting as a destabilising force, the need for alternative alliances and renewed multilateralism between other parties has never been clearer. Already, the US absence has drawn others closer. After Rubio's withdrawal, the EU publicly endorsed South Africa's G20 agenda. Within weeks, the EU and South Africa held their first summit since 2018, marking a thaw in previously strained relations. Strangely then this year's G20 could prove to be its most consequential since its inception. Will it become the moment when the rest of the world reaffirms a commitment to open markets, trade and mutually beneficial cooperation? Or will it cement the beginning of the end for the rules-based global economy? In that sense therefore the timing of South Africa's G20 presidency could not be better. As a nation that once symbolised the post-Cold War liberal ideals of inclusion and equality, it is perhaps fitting that it should fall to us to rally the Global South and like-minded powers toward a new consensus. But the challenge is enormous. Can Ramaphosa — wounded politically and isolated diplomatically — rise to the occasion? Can South Africa lead a meaningful G19 in the absence of the US? To quote Tennyson's Ulysses, while 'death closes all, some work of noble note may yet be done'. The South African president may identify with the itinerant Greek after his own interminable political odyssey. Given his patchy track record in office, the answer may not be encouraging. And yet, history never asks whether leaders are ready. It simply presents the moment. Ramaphosa now faces his. DM
Daily Maverick
5 hours ago
- Daily Maverick
Socioeconomic crisis looms as US tariffs hit Eastern Cape's vital automotive industry hard
The Automotive Business Council says it is hopeful that a proposal for 40,000 tariff-free vehicles for export to the US will find favour, as the impact of tariffs in their current form will be catastrophic for both the manufacturing industry and the Eastern Cape. 'This is not just a trade issue, it's a socioeconomic crisis in the making,' CEO of the Automotive Business Council (Naamsa) Mikel Mabasa said on Tuesday. The organisation, like many others in the Eastern Cape, is grappling to come to terms with the devastating impact of export tariffs imposed by the United States. Mabasa said the export tariffs threatened thousands of jobs in the automotive sector, disrupted hard-won industrial capabilities, and risked devastating communities such as East London, where the automotive sector formed the economic heartbeat of the town. He said Naamsa was, however, encouraged by South Africa's early proposals for a quota of 40,000 duty-free vehicle units per annum, 'which would allow us to retain our footprint in this key market'. He said that if the country could not retain export markets such as the US, 'we risk turning vibrant industrial hubs into ghost towns'. Ripple effects through the value chain He said the ripple effects of production loss due to disappearing export markets would be felt throughout the automotive value chain – from component manufacturers to logistics providers, and across the thousands of workers and families who depended on the sector for their livelihoods. 'Export diversification and finding new markets is not something that can be achieved overnight. Our global competitors are already redirecting their exports into markets we traditionally serve. This intensifies the pressure on our original equipment manufacturers (OEMs), who must now absorb rising costs, reduce production, and reconsider future investments,' he said. Urgent diplomacy needed 'We have also taken note of President Cyril Ramaphosa's formal response on the same day, which confirmed South Africa's diplomatic and strategic approach to this matter. He said South Africa's automotive sector was particularly vulnerable to the 25% sectoral tariff imposed under Section 232 of the US Trade Expansion Act of 1962, which specifically targeted automotive exports. This escalation in trade tensions poses a serious threat to one of South Africa's most globally integrated and export-oriented industries. He said the United States had consistently been South Africa's second-largest trading partner and key export destination for South African manufactured vehicles. Agoa at risk – billions in trade and thousands of vehicles 'Since the inception of the African Growth and Opportunity Act (Agoa), the automotive industry has benefited from substantial two-way trade and investment. In 2024, the auto sector accounted for 64% of all Agoa trade between South Africa and the US, generating R28.6-billion in export revenue, with 24,681 vehicles exported to the US under Agoa,' Mabasa said. He said the effect of just the anticipation of the high export tariffs, however, had been devastating to the industry and had an immediate effect on trade performance. He said that even before the formal effect of the tariffs, vehicle exports to the US dropped by 73% in the first four months of 2025, followed by a further decline of 80% and 85% in April and May, respectively. 'This represents a risk of a direct loss of vehicle and component export volumes, and annual export earnings, which would be difficult to recover in the short term,' he said. OEMs under pressure But the news is even worse, he said, as tariff disruptions placed major pressure on [OEMs], who had made long-standing industrial commitments to South Africa and invested significantly in local manufacturing, skills development and export infrastructure. The SA automotive industry contributes 22.6% of the country's total domestic manufacturing output and directly supports 110,000 formal sector jobs. Mabasa said Naamsa welcomed the SA government's continued diplomatic engagement with the US, including discussions held on the sidelines of the US-Africa Summit in Luanda on 23 June 2025, and the submission of SA's Framework Deal on 20 May 2025 to address the concerns raised by the US government. 'We urge both governments to accelerate negotiations toward a balanced, rules-based trade agreement. We are encouraged by early proposals for a quota of 40,000 duty-free vehicle units per annum, which would allow us to retain our footprint in this key market. It's vital that we use this opportunity to preserve the business case for continued investment', he said. Mabasa, however, emphasised the need to prepare for a more uncertain and competitive global landscape. Behind every statistic are people and communities 'Naamsa is equally concerned about the livelihood impact of these developments. Behind every tariff statistic are real people – auto workers, supply chain technicians, logistics operators and their families. Nowhere is this more visible than in East London, a community that has grown and thrived on the back of automotive exports. 'The erosion of this trade threatens to unravel decades of socioeconomic progress. We urge all parties involved in the diplomatic negotiations to recognise the strategic and social importance of safeguarding mutually beneficial trade frameworks like Agoa, and to avoid short-term decisions that carry long-term consequences for vulnerable regions,' Mabasa said. CEO of the Nelson Mandela Bay Business Chamber Denise van Huyssteen, said it was clear that the US trade tariffs, planned for implementation on 1 August, would have a disproportionate impact on the Eastern Cape economy given its high reliance on the automotive sector. 'The initial most vulnerable automotive and components manufacturers will be those who directly export products to the United States. The tariffs will put them in a very uncompetitive position, making it difficult to continue to do trade with the US, which could lead to export orders drying up. This, in turn, will have a knock-on impact on direct and indirect suppliers located in East London and Nelson Mandela Bay, and the overall supporting ecosystem around these manufacturers, who may or may not be able to withstand the loss in volume. 'Additionally, as the volumes, especially of [OEMs], potentially decline, economies of scale are diminished, potentially putting some components manufacturers in a position where they are unable to continue a viable supply to their other OEM customers located elsewhere in the country,' she said. Competitiveness crisis She said the tariff structure also meant that manufacturers who exported products to other parts of the world may now be competing with other countries that had significant cost advantages over South Africa, as they faced lower tariffs or could absorb the tariffs. 'Essentially, the global trade order has been upended, and this is likely to affect global manufacturing footprints and where the best locations will be to produce products in the future,' Van Huyssteen said. She said that switching markets was not a quick solution as these measures took time to implement, and neither would 'replace' current OEMs with new ones. 'On this score, and in order to retain employment, it is vital that any potential incoming OEM investors commit to utilising local components for their manufacturing operations,' she said. Unemployment warning for Nelson Mandela Bay She said the chamber also remained deeply concerned about the devastating impact these 'tariff wars' might have on Nelson Mandela Bay's economy and the thousands of jobs supported directly and indirectly through the automotive industry and its supply chain. 'This, in turn, will add to the already unacceptably high unemployment and poverty levels in Nelson Mandela Bay and the Eastern Cape. It must be remembered that Nelson Mandela Bay is home to the greatest number of automotive component suppliers in the country. Furthermore, 41% of the country's automotive manufacturing employment is based in the Bay,' she said. Call for government urgency 'Given how small SA's economy is, the country's response should not be to retaliate, but rather to look internally and consider deploying incentives to support local manufacturers, rather than to keep others out by way of tariffs. This should also incorporate policy support and assistance in establishing new markets for SA-produced goods.' She called for urgency on the side of the government. 'The government needs to move fast and take action in addressing barriers such as excessive red tape and complex policies associated with doing business in the country. Absolute urgency is required to improve the country's competitiveness versus other emerging locations, which have, over the years, become much more attractive investment destinations. 'These even include some countries on this continent who have surpassed South Africa in some key performance areas. Priority focus must be placed on ensuring that the basic enablers are in place, such as well-maintained infrastructure, efficient logistics and the delivery of basic services at a local municipal level, to help improve the competitiveness of local manufacturers and to sustain their continued operations in the Bay.' MEC warns Mercedes-Benz may exit Speaking at the Finance Committee in the Council of Provinces last week, Eastern Cape MEC for Finance Mlungisi Mvoko said they had held discussions with the Department of Trade, Industry and Competition (DTIC), as the matter significantly affected the Eastern Cape. He highlighted that Mercedes-Benz, currently exporting 90% of the vehicles it manufactures in East London to the United States, was facing the most risk. Mvoko warned that the company might consider withdrawing from South Africa due to the tariff changes. Mvoko said that if Mercedes-Benz were to leave, it would have devastating consequences for the East London Special Economic Zone (SEZ), where many companies existed solely to supply the vehicle maker. He also made it clear that thousands of families in East London and Qonce were reliant on Mercedes-Benz operations. DM
