South Africa's trade relationship with the United States (US) faces another significant challenge following the announcement that the country is to lose its preferential access to the American market under the African Growth and Opportunity Act (AGOA).
The programme has played a role in facilitating exports between Africa and the US, including automotive products and components. Although AGOA represents only a portion of South Africa's overall exports to the US, its withdrawal could affect established manufacturing relationships and supply chains, making the next few months important for government, industry and organised labour.
AGOA is a United States trade programme introduced to provide eligible sub-Saharan African countries with preferential, lower-tariff access to the American market for qualifying exports. Its purpose is to encourage trade, investment and economic development by making African products more competitive in the world's largest economy.
For South Africa's automotive industry, the programme has provided an additional trade channel for manufactured products, including automobiles. However, its importance extends beyond the vehicles exported directly to the US. Automotive manufacturing involves complex regional supply chains, with components and other inputs sourced from different countries. The withdrawal of preferential access could therefore have implications for manufacturers and suppliers participating in these interconnected value chains.
South African vehicle exports to the US include components manufactured in neighbouring African countries, illustrating how the automotive industry contributes to trade and industrial activity beyond South Africa's borders. The South African government has also pointed out that the country sources inputs from the US for goods manufactured for export under AGOA, including automobiles and boats.
The American position was outlined by US Trade Representative Ambassador Jamieson Greer following President Donald Trump's notification to Congress and the governments of South Africa and Rwanda of his intention to terminate their participation in the programme from 1 January 2027.
According to him, the decision followed an annual interagency review of sub-Saharan African countries' eligibility for AGOA. "Based on the review, President Trump found that the governments of Rwanda and South Africa are engaging in practices that are inconsistent with AGOA's eligibility criteria."
He identified concerns including barriers that undermine American trade and investment, as well as practices that allegedly pose threats to US national security and foreign policy interests in the region.
Regarding South Africa specifically, the Trump administration raised concerns about barriers to US trade and investment, corruption and threats to American national security and foreign policy interests.
South Africa's government has acknowledged the announcement but maintains that the decision does not define the broader relationship between the two countries.
Trade, Industry and Competition Minister Parks Tau reaffirmed South Africa's commitment to maintaining a constructive and balanced partnership with the US, while emphasising the need for continued engagement.
"This decision does not define the broader relationship between South Africa and the US; however, a solution depends on the willingness of both parties to find solutions," Tau stated.
He says government remained focused on protecting the interests of sectors affected by the decision. "At the same time, government will support affected sectors, protect South Africa's national interests and continue pursuing trade, investment and shared economic opportunities with the United States."
Government also highlighted that South Africa had made efforts to address American concerns during negotiations that began in 2025. These included offering additional concessions beyond those agreed in 2015 through the proper channels.
However, government expressed disappointment that the US had introduced new issues outside the scope of the existing negotiation process. It maintained that the concessions offered by South Africa respected due process, protected the country's biosecurity and constitutional requirements, and complied with its World Trade Organisation obligations.
Importantly, government also sought to put the significance of AGOA into perspective by pointing to the broader trade relationship between the two countries.
In 2025, approximately 89% of South Africa's exports to the US were conducted under ordinary World Trade Organisation most-favoured-nation terms, while only about 10% qualified as AGOA exports. This was down from 28% in 2024.
AGOA exports amounted to nearly US$1.7 billion in 2025, compared with US$4 billion in 2024, representing approximately 1% of South Africa's total global exports.
Bilateral trade between the two countries reached US$28.8 billion in 2025. More than 600 American companies operate in South Africa, supporting approximately 134 600 jobs.
Government also highlighted South Africa's importance as a supplier of critical minerals to the US, providing 12 of the 50 minerals classified as critical by America, as well as 70% of the isotopes used in US cancer treatments.
Despite the announcement, government says it remains committed to diversifying South Africa's export markets. Its Cabinet-approved Industrial Development Strategy and Butterfly Strategy identify opportunities in markets including the African Continental Free Trade Area, India, the Southern African Development Community, the European Union, the United Kingdom, ASEAN, MERCOSUR and China.
The Congress of South African Trade Unions (COSATU), meanwhile, has expressed serious concern about the potential consequences of South Africa's removal from AGOA, particularly for employment in manufacturing and agriculture.
COSATU acknowledges that AGOA has benefited both African countries and the US. It points out that the programme has helped develop regional trade, with South African vehicle exports to the US incorporating components manufactured in neighbouring countries. It also notes that the supply of African goods, including critical minerals, has benefited American businesses and contributed to an estimated 200 000 direct jobs in the US.
The trade union federation is particularly concerned about the impact on thousands of South African jobs linked to AGOA-supported exports.
It refers to job losses already experienced at factories and companies in Cape Town, Atlantis, Malmesbury and Tulbagh, warning that further disruption could affect workers, farmers and their families.
COSATU has called on government to use the 60-day notice period to negotiate solutions with the US, while insisting that discussions must respect South Africa's sovereignty and constitutional democracy.
It has also called for urgent support measures for vulnerable workers, businesses and industries. These should include subsidies and incentives, tax rebates and holidays, as well as assistance through the Unemployment Insurance Fund's Temporary Employer/Employee Relief Scheme.
The federation believes that South Africa must also accelerate efforts to diversify its export markets, particularly across Africa, but also in Europe, Asia, Canada and Brazil.
For South Africa's automotive industry, the developments place renewed attention on the importance of international trade relationships and regional manufacturing networks. While AGOA accounts for a relatively small proportion of the country's overall exports to the US, its role in supporting specific manufacturing and export value chains means that its withdrawal remains a matter of concern for the businesses and workers involved.
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I have bad reflexes. I was once run over by a car being pushed by two guys
Woody Allen
South Africa’s new vehicle market continued to grow in October, but the automotive industry and consumers faced mounting cost pressures as higher fuel prices added to the cost of motoring and operating commercial fleets.
South Africa’s new vehicle market continued to expand in October, with domestic sales increasing by 10.4% year on year, while vehicle exports recorded a recovery after months of declining volumes.
South Africa’s new vehicle market recorded its strongest monthly sales performance of 2026 in October, with 61 890 vehicles sold as the industry maintained the higher levels of activity established towards the end of the third quarter.
