South African national economists have issued a warning that the country’s AGOA duty free access to the North American business sector could be coming to a close, therefore posing a significant problem in the immediate future for the tyre, equipment and automotive parts sectors. Which traditionally are reliant on these trade benefits to stay competitive with other subsidised markets. If the duty-free access is no longer available to South Africa, then it could trigger increased tariffs, cancelled contracts and supply chain disruptions.
National and Central Vice-Chairperson of the Tyre, Equipment Parts Association (TEPA) Dylan Petzer says, “Billions of export SA Rand sales will be at potential risk, making the future uncertain and strategic agility will be key to staying ahead of the game.”
AGOA has been a reliable lifeline for equitable participation by South Africa’s automotive exports to the U.S, covering around 90 tariff lines under Chapter 87. Dylan adds “For TEPA members who supply tyres, automotive components, and repair equipment, the potential loss of AGOA is more than just an inconvenience – it’s a serious direct threat to South African tyre and automotive manufacturers and exporters who are looking to compete equitably in the international market. Many of our members have spent years cultivating relationships with U.S. buyers and relying on AGOA’s duty-free status to level the playing field.”
Since AGOA’s introduction, South Africa’s automotive-related exports to the U.S. have surged from a modest $151 million in 2000 to an impressive $1.6 billion in 2016. Passenger vehicles dominate these numbers, but parts and accessories alone accounted for $62 million in 2016. Breaking it down further: $42 million benefited from the Generalized System of Preferences (GSP), $1 million under AGOA (non-GSP), and $18 million without preference. (AGOA, 2025).
Due to this latest development. TEPA members will need to explore alternative markets like the African Continental Free Trade Area (AFCFTA) and in Europe as well as exploring opportunities afforded by the shift remain towards green manufacturing and electric vehicle components.
