Business
South Africa’s Trade Future in Jeopardy as US Relations Sour Over AGOA and Land Laws
A trade disaster could be looming for South Africa, as tensions with the United States threaten the country’s participation in the African Growth and Opportunity Act (AGOA)—a deal that provides duty-free access to US markets for certain African countries.
The Select Committee on Economic Development and Trade has raised concerns over growing speculation about South Africa’s potential exclusion from AGOA, urging the government to provide clear communication on the issue.
Billions at Stake: Why AGOA Matters to South Africa
AGOA has been a crucial trade platform for South Africa, allowing duty-free exports of products like motor vehicles, fruit, and wine to the US.
- In 2022, South Africa exported over R55 billion worth of goods to the US under AGOA.
- The US remains South Africa’s second-largest trading partner, with R61.49 billion in exports recorded in the first five months of 2024 alone.
- If AGOA benefits are lost, South African exports to the US will face higher tariffs, making them less competitive and potentially weakening the trade balance.
While AGOA is set to expire in September 2025, uncertainty has grown over whether South Africa will remain part of the program under Donald Trump’s potential second term as US president.
Trump’s Stance: A Blow to South Africa’s Trade Prospects?
Concerns escalated this week after Donald Trump stated that he would cut all future funding to South Africa, citing concerns over land expropriation laws.
Trump alleged that South Africa is confiscating land and discriminating against “certain classes” of people—referring to the newly signed Expropriation Act, which outlines conditions for land seizures, including cases where zero compensation may apply.
This has sparked diplomatic tensions, with South African officials—including President Cyril Ramaphosa and International Relations Minister Ronald Lamola—defending the legality and fairness of the law.
“There is no arbitrary dispossession of land or private property,” said Lamola. “This law aligns with South Africa’s Constitution and is similar to eminent domain laws in the US.”
Despite these assurances, the political fallout has not subsided, with US Secretary of State Marco Rubio announcing he will skip the upcoming G20 summit in Johannesburg in protest against the law.
South Africa’s Foreign Policy Under Scrutiny
Adding to the pressure, South Africa’s stance on the Hamas-Israel war and its close ties with BRICS allies China and Russia have also put it at odds with US policymakers.
Some American lawmakers have explicitly called for South Africa’s removal from AGOA, arguing that its foreign policy contradicts US interests.
With Trump’s administration likely to take a more aggressive stance on trade and US lawmakers pushing for South Africa’s exclusion, the country’s AGOA future looks increasingly uncertain.
What Happens Next?
A scheduled briefing on AGOA by Trade and Industry Minister Parks Tau was postponed this week due to a Cabinet meeting, further delaying clarity on South Africa’s position.
The meeting has now been rescheduled for 18 February, with increased pressure on government officials to act quickly to secure South Africa’s AGOA benefits.
“This issue has been looming for some time,” the Select Committee noted. “We need urgent engagement to prevent economic fallout.”
Is South Africa Ready for an AGOA Exit?
If South Africa is excluded from AGOA, the economic consequences could be severe—especially for industries reliant on US exports. While the government remains optimistic, growing diplomatic tensions and political uncertainties mean that businesses must start preparing for a post-AGOA future.
Will South Africa be able to secure its AGOA status before it’s too late?
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