The Western Cape's exports to the United States have declined significantly, falling 16.2% to R14.51 billion in 2025. This decrease is attributed to additional tariffs imposed by the US and the temporary expiry of African Growth and Opportunity Act (Agoa) benefits. The decline has put pressure on the province, which accounted for more than half of South Africa's agricultural and processed agricultural exports to the US last year.
The US has dropped from the province's second-largest export market to fourth, according to Western Cape Premier Alan Winde. He attributed the decline in export volumes to a difficult trading year, additional tariffs, and the temporary expiry of Agoa benefits. Agoa has been extended to December 31, 2028, preserving preferential duty-free access to US markets for goods from eligible African countries. However, it is unclear whether South Africa will remain a beneficiary.
Local exporters have faced successive US tariff measures, including a 30% tariff imposed in August 2025. After the US Supreme Court struck down the emergency tariff regime in February, the administration introduced a temporary 10% global levy, followed by duties of 10%-12.5% on goods from 60 trading partners. The trade uncertainty has coincided with deteriorating political relations between the two countries, fueled by US President Donald Trump's false allegations of racial discrimination against whites in South Africa.
Premier Winde has advised a reset in diplomacy to mitigate the effects of the trade tensions. He told Business Day that the national government needed to repair diplomatic ties to protect investment and jobs. Winde emphasized that commercial relationships remained active, but businesses could not escape the consequences of tensions between the two governments. He expressed concern that the decline in exports would negatively impact the province if diplomacy was not prioritized.
Winde is seeking a meeting with Trade, Industry & Competition Minister Parks Tau to discuss the pressures on provincial businesses and how national negotiations could help them. He emphasized that trade negotiations remained a national responsibility, with the province using its relationships to press for better access. The premier highlighted the importance of maintaining competitiveness in the market, stating that high tariffs would make it challenging for businesses to remain competitive.
Despite the trade tensions, investment in the Western Cape has held up, with the province recording R11.41 billion in US investment in 2025, its highest in a decade. Winde said the US had been the province's leading foreign direct investor over the past five years, making the diplomatic relationship particularly important. The province is seeking to diversify its markets but also needs to protect relationships already supporting businesses and employment.
Winde expressed concern that excluding South Africa from Agoa would affect other African beneficiaries that relied on its banks, technology providers, and logistics companies. He urged Pretoria to seek ways to ease the dispute, citing Mexico's efforts to reduce pressure from Washington. The country's high unemployment rate made a prolonged confrontation with a major investor and trading partner particularly costly, he said, highlighting the need for strategic negotiations.
Key points
- Western Cape's exports to the US dropped 16.2% to R14.51bn in 2025.
- The decline is attributed to additional tariffs and the temporary lapse in preferential trade benefits.
- Premier Alan Winde is seeking a meeting with Trade, Industry & Competition Minister Parks Tau to discuss the pressures on provincial businesses.
