South Africa’s Agricultural Sector on Edge as AGOA Future Hangs in the Balance

The Agricultural Business Chamber of South Africa (Agbiz) has raised serious concerns over the country’s future in the African Growth and Opportunity Act (AGOA), a crucial trade agreement with the United States. These concerns follow US President Donald Trump’s recent decision to cut USAID to South Africa, sparking fears of further economic fallout.

Potential Economic Setback

Wandile Sihlobo, chief economist at Agbiz, warned that South Africa’s removal from AGOA would introduce new tariffs averaging around 3% on exports to the US. This could weaken the competitiveness of South African products in the American market.

“The US remains a vital trade partner despite accounting for only 4% of South Africa’s exports,” Sihlobo said. “Agricultural exports to the US are heavily concentrated in key sectors such as citrus, grapes, wine, and nuts.”

Industries Most at Risk

Experts suggest that the impact of losing AGOA benefits will vary by industry. Professor Waldo Krugell from North-West University explained that while some industries—like citrus—may experience a lesser effect, the automotive sector is deeply concerned.

“If AGOA benefits are lost, it’s uncertain whether South Africa can negotiate a new Free Trade Agreement with the US,” Krugell noted. “Reciprocal tariffs could make exports to the US significantly more expensive, reducing demand and potentially leading to job losses.”

The Political Factor

The uncertainty surrounding South Africa’s political stance on global issues may further jeopardize AGOA participation. Professor André Thomashausen, an expert in international law at Wits University, pointed out that some US officials view South Africa’s foreign policy as misaligned with American interests.

“There is growing sentiment in Washington that South Africa might be denied AGOA benefits due to its perceived political affiliations,” Thomashausen said. “If AGOA is lost, South Africa’s industrial manufacturing sector, including major European and American car assembly plants, could take a massive hit—costing the economy up to a million jobs.”

What’s at Stake?

While AGOA accounts for only a fraction of South Africa’s total exports, industries that rely on duty-free access to the US could face significant losses. Jaco Minnaar, president of Agri SA, warned that new import taxes could reduce profitability in labour-intensive sectors like agriculture, particularly affecting citrus and wine producers.

“In a time when job creation is critical, we cannot afford such setbacks—especially in industries like automotive manufacturing, where the long-term consequences could be severe,” Minnaar cautioned.

What Happens Next?

As AGOA renewal discussions continue, South Africa faces growing pressure to secure its trade relationship with the US. Without a viable alternative trade agreement, key industries may struggle to maintain their competitive edge in one of the world’s largest consumer markets.

The coming months will be crucial in determining whether South Africa can retain its AGOA benefits—or prepare for a future of higher tariffs and economic challenges.

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