The extension of the African Growth and Opportunity Act (Agoa) 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, the local industry body warns.

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 game-changer for the South African motor industry for 25 years.

Since being enacted in 2000, the trade arrangement has helped drive South African vehicle exports to the US – which rose from 853 units in 2000 to 14 873 units in 2001 alone.

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

However, since 2025, US protectionist policies – notably 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.

Consequently, South African vehicle exports to the US fell 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 manufacturing output, at 23.8% in 2025, as well as employment, export earnings and industrial investment.

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

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

“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, a non-reciprocal preferential trade programme the US offers to eligible sub-Saharan African countries, expired on September 30, 2025, but, as of February this year, the US had approved an extension until December 31, 2026, with retroactive effect.

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