US tariffs cost South African company R750 million
The wave of US tariffs has begun to hit South African companies, with one alone losing R750 million in contracts overnight, which is likely a small drop in the ocean of what’s to come.
Jendamark Automation has been caught in the crossfire of Washington’s latest tariff decisions. Managing director Siegfried Lokotsch told City Press that the impact has been swift and severe.
The company is a Gqeberha-based manufacturer of automated assembly lines and production software for global automotive giants such as Ford, BMW, Volkswagen, and Mercedes-Benz.
As a direct result of these new tariffs, Lokotsch revealed that Jendamark had lost out on R750 million in contracts that were on the verge of being finalised within the next two to three months.
He said the blow risks the livelihoods of the company’s 500 employees and around 3,000 people working in its local supply chain.
The US has implemented 30% tariffs on products from certain countries, including South Africa, and US President Donald Trump has threatened to slap an additional 10% on goods from BRICS nations if re-elected.
The Nelson Mandela Bay Business Chamber, representing 700 businesses in the region, has also outlined the scale of the threat.
CEO Denise van Huyssteen warned that the Eastern Cape could be the province most adversely affected by the unfolding trade crisis.
“The Eastern Cape economy is likely to be the most adversely affected in the country by these developments. This is not just an issue which affects companies that trade with the US; it is a global issue,” she said.
“The global trading system has been upended, and relationships between longstanding trading partners will shift as countries move to protect their own interests and domestic economies.”
A warning to Ramaphosa
Van Huyssteen noted that global multinationals were already adjusting their manufacturing footprints to move operations into markets where they can produce more efficiently and with fewer trade risks.
This shift could hollow out South Africa’s role in global supply chains, especially in the crucial automotive sector.
“We are deeply concerned about the impact any reduction or shifts in the automotive landscape may have on the ecosystem which surrounds the original equipment manufacturers (OEMs), which undertake complete knocked-down (CKD) assembly in South Africa,” Van Huyssteen said.
“These OEMs are responsible for creating well over 100,000 jobs at their own operations and within their component supplier networks. The broader employment impact across the supply chain exceeds 500,000 formal jobs.”
She added that the knock-on effects of a decline in manufacturing activity would ripple far beyond the factory floor, affecting logistics, IT services, banking, real estate, hospitality, education, and retail.
In a letter to President Cyril Ramaphosa and members of the economic cluster, National Metalworkers’ Union of South Africa (Numsa) general secretary Irvin Jim warned of a national jobs catastrophe.
“Manufacturing sectors are facing a job loss bloodbath from the dumping of products that are competing directly with the automotive sector, components supplier value chain, the tyre sector, the steel and engineering sector,” Jim said.
“This has been worsened by tariffs imposed against us by the United States of America.”
Jim said companies in the component value chain are already closing, with major employers like Macsteel in Gauteng retrenching hundreds of workers.
“We are calling on the Presidency to take the necessary steps to protect the current manufacturing capacity and, most importantly, to protect jobs. In manufacturing, if you allow a company to close, such jobs will never come back,” said Jim.
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