The United States has announced plans to terminate South Africa's eligibility for the African Growth and Opportunity Act (AGOA) effective January 1, 2027. This decision, made by President Donald Trump, was notified to Congress and the governments of South Africa and Rwanda on Monday. The move follows the annual review of sub-Saharan countries' eligibility, with the US citing trade barriers, security concerns, and alleged corruption in South Africa.
The termination notice gives South Africa a 60-day window to engage diplomatically before the decision takes effect. Industry leaders have expressed concerns about the impact on key export sectors, including citrus, automotive, and textiles. According to Wolfe Braude, manager of the fruit desk at the Agricultural Business Chamber of South Africa (Agbiz), these sectors rely heavily on preferential US access and may face stiffer competition from countries with free-trade agreements with the US.
Government data show that AGOA-qualified shipments made up about 10% of South Africa's exports to the US in 2025, valued at roughly $1.7 billion. This represents about 1% of South Africa's global export total, down from 28% in 2024. Braude highlighted that higher fertilizer and fuel costs linked to Middle East tensions could further erode competitiveness without AGOA preferences.
The loss of AGOA privileges could lead to additional US duties, raising the landed cost of South African goods. Agbiz is prepared to supply the South African government with industry data to support negotiations, hoping to explore alternative tariff arrangements or a reconsideration of the withdrawal. The organization is also stressing the need to diversify export destinations.
South Africa has recently secured a zero-duty arrangement with China and is exploring efforts to expand trade with India, Indonesia, the Philippines, Vietnam, and the United Arab Emirates. However, Braude warned that building new market relationships for agricultural products can take one to two years, involving regulatory approvals and investment.
The US Trade Representative, Jamieson Greer, stated that the decision follows the annual review of sub-Saharan countries' eligibility. The review process assesses countries' compliance with AGOA's requirements, including good governance, human rights, and economic policies. South Africa will have to address the concerns raised by the US to potentially reconsider the termination.
As the 60-day period begins, South Africa is expected to engage in diplomatic efforts to mitigate the impact of the termination. The country's export sectors, particularly those reliant on AGOA privileges, will be closely monitoring the negotiations. The outcome will determine the future of South Africa's trade relationships with the US and its ability to maintain competitiveness in the global market.
Key points
- US plans to terminate South Africa's AGOA eligibility in January 2027.
- Termination may impact South Africa's citrus, automotive, and textile exports.
- South Africa has 60 days to engage diplomatically before the termination takes effect.
