naamsa | The Automotive Business Council has noted with concern the United States administration’s announcement of its intention to terminate South Africa’s eligibility for the African Growth and Opportunity Act (AGOA), effective 1 January 2027.
However, the council expects the additional direct impact on automotive exports to be limited, following the substantial decline in vehicle exports caused by Section 232 tariffs.
The development introduces further uncertainty into the bilateral trade relationship and reinforces the importance of sustained diplomatic engagement between the two governments to secure a constructive and mutually beneficial outcome.
From an automotive industry perspective, the additional direct impact of South Africa’s proposed exit from AGOA is expected to be limited, given that vehicle export volumes to the US have already declined substantially following the introduction of Section 232 tariffs.
Importantly, the proposed termination does not close the US market to South African automotive products. Exports will remain possible, although subject to the applicable US tariff regime.
AGOA’s contribution to automotive trade
AGOA has played an important role in strengthening trade and investment ties between South Africa and the United States.
In 2024, the automotive sector accounted for 64% of South Africa’s total AGOA trade with the US, generating R28.6 billion in export revenue, with 24,681 vehicles exported under the programme. These trade flows reflect decades of investment, manufacturing integration and market development.
Section 232 tariffs have already reduced exports
The automotive industry has already faced significant pressure from the 25% tariffs imposed by the US under Section 232 of the Trade Expansion Act of 1962 on imported vehicles from April 2025 and automotive parts from May 2025.
These tariffs apply independently of AGOA eligibility and have substantially eroded the commercial value of the preferential access previously available to South African automotive exports.
The impact is evident in export performance. South African vehicle exports to the US declined by 83.2%, from 24,682 units in 2024 to 4,136 units in 2025. This contraction provides important context for assessing the likely incremental impact of the proposed AGOA termination on the automotive sector.
Export diversification remains a priority
At the same time, South Africa’s automotive industry has recorded improved export performance in markets such as Canada, with OEMs demonstrating their commitment to strengthening their presence in the North American region.
While these volumes remain small compared with previous exports to the US, they form part of the industry’s broader export diversification efforts. Established markets and long-standing trade relationships nevertheless remain valuable.
The proposed termination of South Africa’s AGOA eligibility must also be considered in the context of the automotive industry’s wider economic contribution. In 2025, the sector accounted for 23.8% of domestic manufacturing output and supported an extensive network of original equipment manufacturers, component suppliers, logistics providers and related businesses.
Predictable and competitive market access is essential to sustaining production volumes, investment, supplier development and employment.
Preserving established trade relationships
South Africa’s automotive industry remains committed to diversifying export markets, strengthening trade relationships with key markets and advancing opportunities under long-established trade agreements such as the EU-SADC EPA, SACUM UK EPA and the African Continental Free Trade Area (AfCFTA).
However, diversification takes time and does not replace the value of established markets and long-standing investment partnerships. The US remains an important trading partner, and preserving commercially viable access is in the interests of both economies.
Protecting investment, jobs and industrial capability
naamsa notes the Department of Trade, Industry and Competition’s (the dtic) offer of support to industries that may be affected by these developments.
naamsa will continue engaging with the department and other relevant stakeholders, drawing on this support where necessary. It will also provide industry evidence and economic analysis to inform ongoing trade discussions and support efforts towards a balanced and sustainable trade outcome.
The priority remains to protect the competitiveness of South African manufacturing, sustain investment, and safeguard the jobs and industrial capabilities built through decades of automotive development.