South Africa’s Auto Industry Braces for Uncertainty as Trump Threatens AGOA

South Africa’s automotive industry is on edge as former U.S. President Donald Trump signals a potential end to the country’s duty-free trade access under the African Growth and Opportunity Act (AGOA). With exports to the U.S. valued at nearly $1.9 billion annually, the possible loss of AGOA benefits could have severe economic consequences.

What’s at Stake for South Africa’s Auto Industry?

AGOA has played a critical role in South Africa’s economy, allowing duty-free vehicle exports to the U.S. This agreement has supported 86,000 direct jobs and an additional 125,000 in the supply chain, making it a pillar of the country’s manufacturing sector.

“South Africa is AGOA’s biggest beneficiary, and losing it would be a huge blow,” warns Billy Tom, head of The Automotive Business Council (Naamsa). The U.S. is currently South Africa’s third-largest export market, and a disruption could impact the entire value chain, affecting workers, suppliers, and global manufacturers operating in the country.

Why Is Trump Targeting AGOA?

Trump’s threats to South Africa’s AGOA status stem from multiple factors, including geopolitical tensions, U.S. foreign policy interests, and his focus on protecting American manufacturing jobs.

According to Richard Morrow of the Brenthurst Foundation, Trump could invoke AGOA’s clause requiring beneficiaries to align with U.S. security and trade policies. South Africa’s growing diplomatic ties with Russia and China, as well as its legal actions against Israel, have strained relations with Washington.

Moreover, Trump has historically positioned the U.S. auto industry as a key issue in his economic agenda. By revoking AGOA benefits for South Africa’s auto sector, he may aim to bolster domestic car manufacturing and appeal to blue-collar voters.

The Ripple Effect: Global Manufacturers at Risk

Ironically, removing South Africa’s auto industry from AGOA could hurt major global car brands more than South African businesses. Seven international automakers—BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota, and Volkswagen—operate in the country, using it as a hub for exports.

Isaac Khambule, a political economist at the University of Johannesburg, points out that “most businesses in South Africa are aligned with Western interests, including U.S.-friendly economies like Germany and Japan.” If AGOA benefits are revoked, these manufacturers may suffer, potentially causing job losses and economic instability.

Uncertainty Stalling Investment

Even before any official decision, the uncertainty surrounding AGOA’s future is already impacting South Africa’s economy. Investors are hesitant, automakers are reassessing long-term commitments, and the industry is bracing for potential fallout.

Should AGOA benefits be stripped away, South Africa’s auto sector could face a significant decline, with businesses forced to seek alternative markets or reconsider their manufacturing operations altogether.

What’s Next?

With AGOA set to expire in September 2025, the coming months will be crucial for South Africa’s trade future. Industry leaders are urging the government to engage with U.S. policymakers to secure a renewal or negotiate new trade terms.

For now, South Africa’s auto industry faces a period of uncertainty—one that could reshape its economic landscape for years to come.

South Africa Faces Economic Uncertainty as US Sanctions Threaten Agoa and Trade Relations

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