TRADE (DIS)AGREEMENT: What now? — Experts weigh in after Trump boots SA from Agoa

South Africa will be removed from the duty-free benefits of the African Growth and Opportunity Act (Agoa) from next year, the US government announced on Monday night.

Citrus farmers have called it “a serious blow to the citrus industry”.

Cosatu said it was deeply concerned by the impact South Africa’s exit from Agoa would have on thousands of agricultural and manufacturing jobs linked to it. 

“We have already seen many jobs lost at factories and companies in Cape Town, Atlantis, Malmesbury and Tulbagh, amongst others. We have seen the devastation it threatens to these workers and farmers’ abilities to take care of their families,” said spokesperson Matthew Parks.

The US trade representative, Jamieson Greer, said that President Donald Trump had decided to remove South Africa “for engaging in practices that are inconsistent with Agoa’s eligibility criteria. In South Africa, the Trump administration is deeply concerned by barriers to US trade and investment, corruption, and threats to US national security and foreign policy interests.”

Statement

Ambassador Greer Issues Statement on President Trump’s Intent to Terminate Rwanda and South Africa from the AGOA Trade Preference Program

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Trade, Industry and Competition Minister Parks Tau said last Thursday that if SA were removed from Agoa, it would have 60 days to appeal the decision before any suspension took effect.

After the decision was announced, he said that the government would provide support to companies that were affected.

He said the government had constructively responded to US concerns and had made additional trade concessions, and that it was unfortunate that the US was now raising new issues.

Tau added that although Agoa was important to South Africa, it did not constitute the totality of the economic relationship between SA and the US, as only 10% of SA exports to the US entered under Agoa in 2025, down from 28% in 2024.

“Agoa exports were valued at approximately $1.7-billion in 2025, down from $4-billion in 2024. Agoa exports represented about 1% of South Africa’s total global exports. Bilateral trade reached $28.8-billion in 2025, while more than 600 American companies operate in South Africa, supporting approximately 134,600 jobs,” said Tau.

“Trade relations are complementary and mutually beneficial. South Africa supplies 12 of the 50 minerals regarded as critical by the United States, 70% of US isotopes used, among others, in cancer treatments. South African companies are also invested in the US economy, and the loss of Agoa will undermine these investments and negatively affect existing value chains.”

He added that the government would continue to accelerate the diversification of South Africa’s export markets, but that the US “remains an important trade and investment partner”. He said SA would continue to uphold its “constitutional responsibilities and transformation objectives” – an apparent reference to US demands that SA drop BBBEE requirements for US investors.

Gerrit van der Merwe, the chairperson of the Citrus Growers Association (CGA), said the exclusion from Agoa would lead to job losses, particularly in the Western and Northern Cape, “where entire communities depend on SA-US trade, with Citrusdal a clear example of how an entire town’s economy is directly tied to competitive access to the US market.

“A citrus grower cannot simply divert his crop to another market – markets have different phytosanitary requirements and consumer tastes. Entire orchards have been planted specifically for the US market.”

He said the loss of Agoa exposed South African citrus exports to the applicable US rate of duty, generally between 1.5 and 2.5 US cents per kilogram, compounded by the additional 12.5% Section 301 tariff, which is applicable to all citrus varieties apart from oranges.

But exporters of mandarins, lemons and grapefruit would now be placed “at a severe disadvantage to competitors like Peru and Chile, who benefit from trade agreements as well as shorter transit times”.

CGA CEO Boitshoko Ntshabele added that SA’s removal from Agoa would be a loss for the US consumer as well as for SA, as SA supplied citrus to the US market during the  US off-season.

However, Wandile Sihlobo, President Ramaphosa’s envoy on agriculture and land, said SA’s removal from Agoa was not a complete ban from the US market, as some seemed to think.

He said SA would face an additional Most Favoured Nation tariff of around 3.4% on top of the existing tariffs the current US administration added to various countries.

“Currently, some South African products enter the US market at 12.5% tariffs (Liberation Day tariff). Without Agoa, these tariffs would rise to 15.9%, slightly reducing the competitiveness of some South African products in the US market,” he said.

“Still, one could argue that while this would be a challenging path, it would not necessarily be as catastrophic as we have faced in the past, when we faced much higher US tariffs and still managed to compete.

“Consider South Africa’s agriculture: in 2025, the South African farming sector faced tariffs of around 30%. Still, agricultural exports to the US were strong.”

Anthony Carroll,  a non-resident fellow at the Carnegie Endowment for International Peace, said as a charter member of the US Trade representative’s Trade Advisory Committee for Africa_, he was disappointed in the decision to remove SA from Agoa.

“I have testified before Congress that it is wrong to penalise businesses and workers who have no involvement with government policies. Moreover, the US’s economic relationship with South Africa extends well beyond Agoa products, and I fear that this action will impair business relations in other areas such as critical minerals,” said Carroll.

Eckart Naumann, an independent economist and associate of the Trade Law Centre, said the decision to remove SA from Agoa was regrettable “but does not spell doom for South Africa”.

It would not stop exporters of minerals, manufactured goods and agricultural products from selling their goods in the US market. But it would make some products more expensive for US consumers, and potentially reduce demand for South African-made goods. He noted that only around 10% of exports were in Agoa-eligible tariff lines. However, this did create a valuable though relatively small competitive edge for some products.

Other products, like cars, steel and aluminium, would not be affected as they were already incurring special tariffs of 25-50%, far outweighing the preference margin created by Agoa. 

Naumann noted that South Africa’s top five tariff lines were precious metals and minerals, which accounted for almost two-thirds of South Africa’s total exports to the US in 2025. None are subject to duties, and therefore are not Agoa-eligible.

But, he said, some industries such as citrus and macadamia nuts, would feel Agoa’s loss, although he felt that strong existing commercial relationships and SA’s seasonal advantage should provide reasonable protection.

“But for edible ice – for example, sorbets that have become one of South Africa’s success stories with over $33-million in US exports in 2025 alone – the loss of Agoa will be much more severe, as the 17% standard tariff previously waived by Agoa will soon be added on top of the 12.5% Section 301 tariff, effectively a 30% tariff disadvantage.”

US ambassador to SA Brent Bozell posted on X : “It is regrettable that South African policies led to the termination of AGOA for South Africa.

“This was a predictable and preventable outcome resulting from the rejection by South Africa’s government of real concerns raised by the U.S. Government. I remain hopeful that we can find a path forward to address our larger bilateral concerns…”

DA international relations spokesperson MP Ryan Smith said the decision “is a devastating blow to the South African economy, especially the agriculture and agroprocessing, automotive manufacturing and mining sectors”.

This development was avoidable and completely unnecessary in the “context of sound economic diplomacy and negotiation” with the US, which the minister of international relations and cooperation, Ronald Lamola, had “repeatedly refused to concede and failed to broker”, he added.

“Hundreds of thousands of South Africans employed through Agoa-dependent industries will now pay the price for Minister Lamola’s ideological obstinacy and sheer diplomatic ineptitude,” he said.

“His very public and deliberately antagonistic approach towards SA-US relations has put on full display the ANC’s lack of diplomatic finesse and warped international priorities at the economy’s expense.” DM