The extension of the African Growth and Opportunity Act (Agoa) through to December 31, 2028, provides important strategic breathing room for South Africa, while also preserving a framework for future trade engagement with the US, says naamsa | The Automotive Business Council.

For the domestic automotive industry – as the single largest beneficiary of Agoa over the past quarter century – the extension does not, however, materially alter current trading conditions, warns the local industry body in a statement issued on Tuesday.

naamsa says the Section 232 tariff of 25% on imported vehicles and automotive components continues to nullify the preferential market access benefits that South African vehicle manufacturers historically enjoyed under Agoa.

As a result, while the extension provides valuable strategic and policy continuity, it does not restore economic certainty, export competitiveness, or the full commercial benefits previously derived from the programme by the South African automotive industry.

The duty saving on passenger car exports to the US under Agoa represented a gamechanger for the South African motor industry for 25 years, notes the industry body.

Since being enacted in 2000, the trade arrangement provided the necessary impetus for the domestic automotive industry to increase vehicle exports to the US – up from 853 units in 2000 to 14 873 units in 2001 alone.

The US subsequently became South Africa’s top export destination for vehicles from 2008 to 2013 and, with the exception of 2019, consistently remained the domestic automotive industry’s second largest export destination from 2011 to 2024.

However, since 2025, US protectionist policies – in particular the 25% Section 232 tariff on vehicles imposed on  April 3, 2025, and on components on May 3, 2025 – have nullified the Agoa concession to the South African automotive industry, says naamsa.

Consequently, South African vehicle exports to the US decreased by 83.2% from 24 682 units in 2024, to 4 136 units in 2025.

The economic implications extend far beyond trade statistics, warns naamsa,

South Africa’s automotive industry is a major contributor to the country’s manufacturing output, at 23.8% in 2025, as well as employment, export earnings and industrial investment.

South Africa’s trade agreements underpin production volumes that enable domestic manufacturers to achieve economies of scale, support supplier localisation and sustain long-term investment decisions, says naamsa.

The continuation of Section 232 tariffs, therefore, continues to put pressure on South Africa’s exports to the US market, and implies a material risk to future export growth and industrial expansion opportunities.

“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,” notes naamsa interim CEO and current COO Shinny Gobiyeza.

“Section 232 continues to constrain that opportunity. Our priority must, therefore, be to secure a durable and mutually beneficial trade arrangement with the US that supports production, protects investment, sustains jobs and enables South Africa to compete in global automotive markets.”

Agoa is a non-reciprocal preferential trade programme that the US offers to eligible countries in sub-Saharan Africa.

The agreement expired on September 30, 2025, but, as of February this year, the US had approved a one-year extension until December 31, 2026, with retroactive effect.

On August 8, the US Senate extended Agoa through to December 31, 2028.

The two-year extension preserves duty-free access to the US for the current eligible countries, including South Africa, but the Bill still requires the US President’s signature.