AGOA exit: How exposed is South Africa?

Household consumption expenditure is equal to incomes (less savings), and for exporters to the US the loss of AGOA benefits will have a modest impact which varies across type of exports but exports themselves to the US will not cease.

AGOA (the African Growth and Opportunity Act) is a piece of US legislation and not a trade treaty, allowing eligible sub-Saharan African countries duty free trade with the US, reducing the cost of certain goods into the US, increasing competitiveness.

The US has said it will end South Africa’s duty-free benefits under AGOA, effective January 1, 2027. Nationally, the effect will be minimal on SA at a GDP level as 7% of SA’s exports go to the US. The bulk of the 7% (5%) are minerals and metals.  

However, most of SA’s metals and minerals exports are not impacted by AGOA but by separate tariffs or exemptions from the US, and as such are not impacted by AGOA or its removal. Of the remaining 2%, the bulk is manufactured goods (1.7%).

Agricultural products, the third remaining category of South African exports to the US, accounts for 4% of the 7% of total South African exports to the US. These (agricultural produce) will no longer be tariff free under the loss of AGOA benefits.

For households, much depends on their level of exposure to exporting to the US in terms of earning incomes. There is no prevention of goods being exported to the US under the loss of AGOA, instead the goods will become more expensive in the US.

South Africa has realigned its trading relationships

The volatile and disjointed nature of US trade policy, particularly delays and changes in tariffs and severe threats, gave the time and impetus needed to switch global trade patterns (partners), allowing for a better year of growth than expected. 

UNCTAD notes for 2025 “South–South trade expanded around 8%, reflecting deepening economic ties among developing economies. Among individual economies”. “Brazil and South Africa were key drivers in South America and Africa”.

Evidence on this persisted in 2026. US tariffs and geopolitical tensions in general, resulted in changing trade patterns. The loss of AGOA benefits for South Africa was widely expected, new markets found and exports are higher this year than last.

That is, US tariffs and geopolitical tensions in general, resulted in changing trade patterns long before the loss of AGOA, and SA has had two years of volatile US trade policy as a warning already.

Private sector resilience saw supply chains quickly recalibrate to alternative export destinations in the face of US tariffs, along with stockpiling and front-loaded imports in H1.25. Increased spend on AI-related products boosted trade growth as well.

What happens next?

Pretoria has 60 days to appeal the decision.

President Donald Trump cited SA practices "inconsistent with AGOA's eligibility criteria," including barriers to U.S. trade/investment and threats to U.S. national security and foreign policy interests in the loss of SA’s AGOA.

Trade, Industry and Competition Minister Parks Tau stated that South Africa made substantial concessions to address U.S. concerns, accusing Washington of shifting goalposts and raising new issues.

US trade policy has not subdued global trade, or growth in 2025, as was the initial concern. Instead, trade volumes, and so values, lifted, strengthening SA’s GDP trajectory by 0.1% to 0.2% y/y per annum last year.

While AGOA exclusion will have a limited effect on SA, as the majority of goods exported are subject to other tariffs already, full country sanctions from the US against South Africa (not the base case) would have a severe effect. 

US potential sanctions have so far only been focused on certain individuals, not on the country, and extends to visa restrictions after a long warning period. The US has also frozen US financial aid to South Africa, citing a passed land appropriation law.

While the US has imposed economic sanctions previously on enemy countries, US (travel) restrictions are currently for South African individuals not the country. Very severe actions taken by the Trump administration can often be rolled back.

While SA has seen its Agoa trade privileges with the US revoked, they can be renewed in the same fashion. The outcome of today’s mid-term elections is expected to see a significant dampening of powers of Republicans and President Trump.