Threat of AGOA expulsion poses bumpy ride ahead for tyre and component sector

With economists warning that AGOA’s duty-free access to the U.S. market could potentially be on the chopping block, South Africa’s tyre, equipment, and parts industry, a sector traditionally reliant on these trade benefits to stay competitive with other markets that are subsidised, is concerned about possible increased tariffs, lost contracts and supply chain disruptions.

Dylan Petzer National and Central Vice-Chairperson of the Tyre, Equipment Parts Association (TEPA) says with billions in exports at potential risk, the road ahead is uncertain, but strategic agility will be key to staying ahead of the game.

AGOA has been a lifeline for equitable participation by South Africa’s automotive exports to the U.S., covering around 90 tariff lines under Chapter 87. Petzer says for TEPA members who supply tyres, automotive components, and repair equipment, the potential loss of AGOA is more than just an inconvenience – it is a direct threat to South African manufacturers and exporters wishing to compete equitably in the international market. “Many of our members have spent years cultivating relationships with U.S. buyers, 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)

Petzer says it is not just about losing market share - it is about the domino effect. “Our concern is that if exports drop, so does demand for locally produced rubber, manufacturing equipment, and logistics services. This will naturally result in factory downsizing, job losses and wasted investments in meeting U.S. safety and environmental standards. Add to this a substantial loss of tax revenue to the fiscus, and we have a recipe for a potential societal disaster.”

While the sector waits for further developments, TEPA members will continue to explore alternative markets like the African Continental Free Trade Area (AfCFTA) and Europe as well as exploring opportunities afforded by the shift towards green manufacturing and electric vehicle components.

“Losing AGOA would be a significant blow, but our sector is resilient. This industry has faced tough roads before. The key to survival? Strategic agility, relentless advocacy, and a solid partnership between government and industry. It’s time to buckle up because this ride isn’t over yet. TEPA continues to maintain that improved diplomatic relations between the governments of the U.S. and South Africa, based on mutual trust and respect, will go a long way towards restoring stability on the export market front,” he concludes.