South Africa’s tyre, equipment and parts industry says it is concerned about possible tariff jumps, lost contracts and supply chain disruptions, should South Africa’s duty-free access to the US under the African Growth and Opportunity Act (AGOA) end up on the chopping block under new US President Donald Trump.

The Tyre, Equipment, Parts Association (TEPA) says theirs is a sector traditionally reliant on trade benefits to remain competitive with subsidised markets.

TEPA national VP Dylan Petzer says billions of rands of exports are at potential risk, adding that the road ahead is uncertain.

“AGOA has been a lifeline for equitable participation by South Africa’s automotive exports to the US, covering around 90 tariff lines under Chapter 87.”

Petzer says that for TEPA members which supply tyres, automotive components and repair equipment, the potential loss of access under 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 US buyers, relying on AGOA’s duty-free status to level the playing field.”

According to TEPA, since AGOA’s introduction, South Africa’s automotive-related exports to the US have surged from $151-million in 2000, to $1.6-billion in 2022.

Passenger vehicles dominate these numbers, but parts and accessories accounted for $62-million in 2022, with $42-million of this under the Generalised System of Preferences (GSP), $1-million under non-GSP, and $18-million without preference. 

Petzer says it is not just about losing market share, it also about the domino effect this creates.

“Our concern is that if exports drop, so will demand for locally produced rubber, manufacturing equipment and logistics services.

“This will result in factory downsizing, job losses and wasted investments in meeting US 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 awaits further developments, TEPA members say they will continue to explore alternative markets like the African Continental Free Trade Area and Europe, as well as opportunities provided by the shift towards green manufacturing, including electric vehicle components.

“Losing AGOA would be a significant blow, but our sector is resilient. This industry has faced tough roads before,” says Petzer.

“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 maintains that improved diplomatic relations between the US and South Africa, based on mutual trust and respect, will go a long way towards restoring stability on the export market front.”