South Africa’s Auto Industry Urges US to Extend Agoa Trade Agreement
Industry remains optimistic despite looming 2025 deadline
South Africa’s automotive sector remains hopeful that the Africa Growth and Opportunity Act (Agoa), which provides duty-free access to the US market, can be extended beyond its September 2025 expiration date. Despite analysts predicting the agreement’s demise, industry leaders believe persuasive efforts could yield a different outcome.
Government engagement underway
Mikel Mabasa, CEO of Naamsa (the Automotive Business Council), revealed that the organization is working closely with government officials, including President Cyril Ramaphosa who is scheduled to meet with US President Donald Trump next week. Naamsa has provided briefing materials to Special Envoy Mcebisi Jonas to highlight the importance of US trade relations for South Africa’s automotive sector.
“We definitely want to continue to export our vehicles into the US. It’s a very, very attractive market,” Mabasa emphasized.
Trade challenges and tariff impacts
The industry faces significant challenges from recent US trade policies:
- R28.67 billion in automotive exports to the US in 2024 (South Africa’s third-largest export market)
- 25% tariff on vehicle imports imposed by the Trump administration in March 2025
- Potential additional tariffs on automotive components expected this month
Market volatility and contingency planning
Norman Lamprecht, Naamsa’s Chief Trade and Research Officer, described the situation as “fluid and volatile,” noting that domestic manufacturers have developed contingency plans. The organization continues to advocate for Agoa’s extension, which was previously proposed to continue until 2041.
Chinese competition in domestic market
The briefing also addressed the growing presence of Chinese automakers in South Africa:
- 14 Chinese brands operating in South Africa as of 2024
- China accounted for 17.1% of vehicle imports (second only to India)
- Three Chinese manufacturers considering local production facilities
Economic importance of automotive sector
The automotive industry remains crucial to South Africa’s economy:
- 5.2% contribution to national GDP
- 14.6% of total South African exports
- Ambitious production target of 1.4 million vehicles annually by 2035
The industry faces significant challenges from trade uncertainties and increasing competition, but remains committed to maintaining its international trade relationships and domestic growth.
Source: Moneyweb