The start of 2026 has brought mixed fortunes for South African (SA) trade. A Supreme Court ruling in the United States (US) struck down parts of the Trump‑era tariff regime, briefly easing costs.
But Washington swiftly imposed a new global duty, reinstating barriers. Meanwhile, the African Growth and Opportunity Act’s (AGOA) renewal keeps SA inside the preferential framework, though its shield is partial and politically fragile.
Court ruling: a fleeting victory
For a brief period, shipments entered the US without heavy duties. Customs stopped collecting tariffs, easing costs for exporters. Yet the relief ended quickly as a new 15 percent global tariff was introduced under alternative legal authority. The practical outcome is that goods continue to face higher costs, despite the court’s intervention.
AGOA: continuity with limits
Pretoria welcomed AGOA’s renewal, which allows thousands of products duty‑free access. South Africa has long been one of its largest beneficiaries, exporting vehicles, fruit, wine and metals. But AGOA does not override tariffs imposed under other trade laws. Congress retains the power to amend the programme, leaving exporters exposed to political shifts.
Automotive sector under strain
Exports of vehicles to the US fell dramatically in 2025. In the first quarter alone, shipments dropped by 73 percent year‑on‑year, later plunging by more than 80 percent. Mercedes Benz and BMW adjusted production as demand collapsed. Even with global exports reaching historic volumes, North American shipments shrank from 25,554 to just 6,530 units.
Components and suppliers hit hard
Catalytic converters, once a leading export by value, faced steep declines. Engine parts, tyres and automation systems lost ground as American buyers sought cheaper alternatives. Supplier firms reported lost business and contract risks, underscoring the ripple effects beyond vehicle assembly.
Agriculture and manufacturing ripple effects
Wine, fruit and processed foods also faced tariffs, reducing competitiveness. Metals and chemicals joined the list of affected exports, widening the impact beyond the automotive sector. The consequences are felt across industries, from farming to engineering.
Conclusion:
The dual developments of AGOA renewal and new tariffs leave South African exporters in a precarious position. Relief is political rather than practical, and the uncertainty of US trade law continues to cloud investment and planning decisions.
(Additional reporting: Reuters, Business Day)
Photo: Unsplash
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