The proposed extension of the African Growth and Opportunity Act (Agoa) provides South Africa with greater trade-policy continuity but does not restore the automotive industry’s competitiveness in the US market.
The 25% Section 232 tariffs on imported vehicles and automotive components continue to nullify Agoa’s preferential benefits for South African manufacturers, naamsa | The Automotive Business Council said on Tuesday.
The vehicle tariff took effect on April 3, 2025, followed by the duty on components on May 3.
Agoa had provided a 2.5% duty saving on South African passenger-car exports to the US for 25 years, according to naamsa.
Following its enactment in 2000, South African vehicle exports to the US increased by 1 643.6% in a year, rising from 853 units in 2000 to 14 873 in 2001.
The US subsequently became South Africa’s largest vehicle export destination from 2008 to 2013. With the exception of 2019, it remained the domestic automotive industry’s second-largest trading partner between 2011 and 2024.
However, South African vehicle exports to the US fell by 83.2%, from 24 682 units in 2024 to 4 136 in 2025, following the imposition of the Section 232 tariffs.
The decline continued during the first half of 2026, when exports fell by a further 36% to 1 840 units from 2 875 in the corresponding period of 2025.
Vehicle exports to Canada and Mexico increased during 2026 as the industry pursued alternative markets, but these gains were insufficient to offset the loss of US volumes.
Overall light-vehicle exports fell by 8.1% during the first half of 2026 compared with the corresponding period last year.
Naamsa warned that the effect extended beyond trade volumes because the automotive industry accounted for 23.8% of South Africa’s manufacturing output in 2025.
Trade agreements supported the production volumes required to achieve economies of scale, strengthen supplier localisation and sustain long-term industrial investment, the council said.
Naamsa interim chief executive and chief operations officer Shinny Gobiyeza said the industry needed a mutually beneficial trade agreement with the US.
“The extension of Agoa is an important and welcome development, but for South Africa’s automotive industry, market access on paper must translate into commercially competitive access in practice,” Gobiyeza said.
“Section 232 continues to constrain that opportunity. Our priority must therefore be to secure a durable and mutually beneficial trade arrangement with the United States that supports production, protects investment, sustains jobs and enables South Africa to compete in global automotive markets.”
Agoa, which provides eligible sub-Saharan African countries with non-reciprocal preferential access to the US market, expired on September 30, 2025.
A one-year extension to December 31, 2026, was subsequently approved with retroactive effect.
The US Senate approved a further extension to December 31, 2028, on August 8. The legislation still requires final concurrence in the House of Representatives and the US president’s signature.
The US remained the South African automotive industry’s fourth-largest trading partner in 2025. Automotive exports to the country were valued at about R20.4 billion, while imports amounted to approximately R23.6bn.
South African automotive exports to the US increased by 336.7% between 2001 and 2025, while imports from the US rose by 868.2%.
The industry is also looking towards regional integration to reduce its exposure to individual export markets.
The adoption of automotive rules of origin under the African Continental Free Trade Area in February created opportunities to extend production and value chains across the continent, naamsa said.
Africa accounted for R49.5bn, or 17%, of South Africa’s total automotive exports in 2025. Of this African export value, 85.1% was destined for the Southern African Development Community.
