South Africa’s Car Export Won’t be Impacted by UK’s New Tariff Measures
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UK’s Department for International Trade has recently announced the new tariff measures, which will become effective on January 1st, 2021 and will get up to 6,000 types of products involved. According to the new list of products subject to tariffs, cars imported into the UK will be subject to a tariff rate of 10%. However, as South Africa has signed an economic partnership agreement with the UK in Sep. 2019, which allows South Africa to enjoy the favorable tariff-free measure, cars exported from South Africa to the UK will not be subject to the tariff of 10% imposed on all countries.
The UK is one of the most important export partners for the automotive industry of South Africa. In 2019, South Africa exported 387,125 units of cars to the world, 101,401 units of which (more than 25%) were exported to the UK and 37,152 units of which were exported to Germany (its second largest export partner). According to Naamsa, any change in the economic partnership agreement has to be bilaterally negotiated and cannot be made unilaterally by either party. As a result, cars exported from South Africa to the UK will still enjoy the favorable tariff-free measure after the new measures comes into effective in January 2021.