United States deals a massive blow to South Africa’s car industry

South Africa and Rwanda have lost their duty-free access to the US granted under the African Growth and Opportunity Act, which Pretoria had lobbied hard to retain.

This means that South Africa will lose its duty-free access to the United States in many key sectors, including vehicle manufacturing.

“President Donald Trump found that the governments of Rwanda and South Africa are engaging in practices that are inconsistent with AGOA’s eligibility criteria,” US Trade Representative Ambassador Jamieson Greer said in a statement on Monday.

“These concerning and pervasive practices include, but are not limited to, barriers that undermine American trade and investment that pose a threat to U.S. national security.”

In South Africa, the government has been bracing for bad news on its continued eligibility for AGOA as ties between Washington and Pretoria have frayed since Trump returned to the White House in 2025.

AGOA grants tariff-free access to the world’s largest economy for more than 1,800 products and has helped to boost trade between the US and the region since its inception in 2000.

In South Africa, it said, the administration is deeply concerned about barriers to US trade and investment, corruption and threats to US national security and foreign-policy interests.

“It’s yet another trade decision grounded in grievance that flies in the face of what responsible policy should be,” Representative Richard Neal of Massachusetts, the ranking Democrat on the US House Ways and Means Committee, said in a statement.

“The power of our trade laws shouldn’t be twisted so Trump can further policies based on biased accusations made by those in his orbit looking to settle scores.”

Trump has criticised the country’s Black economic-empowerment laws, which were introduced to address inequalities created by apartheid.

South African Trade and Industry Minister Parks Tau told reporters on Friday the country was ready for whatever decision Washington reached, and that the US would remain a valued partner.

America ranks as South Africa’s third-biggest trading partner, after China and the European Union.

Bilateral trade between South Africa and the US last year was $24.1 billion (R400 billion) — less than half the $55.6 billion (R924 billion) of commerce with China, according to data compiled by Bloomberg.

Pretoria has been trying to agree on a broader trade deal with Washington after Trump unveiled harsh tariffs that penalise its automobile sector, potentially putting jobs at risk in a country with one of the highest levels of unemployment in the world.

A disaster for South Africa

Freedom Front Plus leader Corné Mulder warned that losing access to the benefits afforded by AGOA will have negative consequences for the country.

“It will result in substantial job losses, which the country simply cannot afford,” Mulder said in a statement.

“The general economy, and particularly sectors such as agriculture and the vehicle manufacturing industry, will be dealt a severe blow.”

He said that President Cyril Ramaphosa and his Minister of International Relations, Ronald Lamola, must shoulder the blame for this.

“Their refusal to comply with the United States’ requirements for normalising relations has brought about this disaster.”