By Emmanuel Nduka
South African businesses have been urged to brace for the potential loss of preferential access to the United States market under the African Growth and Opportunity Act (AGOA), amid growing uncertainty over the future of trade relations between Pretoria and Washington.
Supply chain expert, Paul Forster, warned that although the proportion of global trade directly exposed to the development remains relatively small, specific export-dependent industries could face significant economic consequences if the proposed withdrawal takes effect in January 2027.
Forster advised businesses to begin reviewing existing commercial agreements, assessing their exposure to the US market and exploring alternative supply chains rather than waiting for diplomatic negotiations between the two countries to reach a conclusion.
He noted that companies needed to adopt proactive strategies to protect their competitiveness, particularly as uncertainty surrounding trade preferences could complicate investment decisions, production planning and long-term contractual commitments.
According to him, expanding trade relations with other African countries presents an opportunity for South African businesses to reduce their dependence on the American market. However, persistent infrastructure deficiencies, inefficient border processes and logistical bottlenecks across the continent continue to undermine the full potential of intra-African commerce.
“We can’t control every decision that’s being made in Washington, but we certainly can control how competitive we make South Africa,” Forster said.
The warning comes after the administration of US President Donald Trump announced its intention to withdraw South Africa and Rwanda from AGOA, with the proposed termination of their preferential trade status scheduled to take effect on January 1, 2027.
In its November 2 announcement, the Office of the United States Trade Representative cited concerns over what it described as practices inconsistent with the programme’s eligibility requirements, including barriers to American trade and investment, as well as issues relating to US national security and foreign policy interests.
AGOA, enacted in 2000, provides eligible sub-Saharan African countries with preferential, largely duty-free access to the American market for thousands of products. South Africa has been among the programme’s biggest beneficiaries, particularly in automotive manufacturing, agriculture, textiles and other export-oriented industries.
Although exclusion from the programme does not automatically prevent South African businesses from exporting to the United States, affected products could lose preferential tariff treatment, potentially increasing costs and weakening their competitiveness against suppliers from countries that retain similar trade advantages.
The South African government has acknowledged the potential implications for businesses, workers and communities dependent on AGOA-supported value chains, saying it is working with affected industries to assess the consequences and develop appropriate support measures.
Official figures indicate that AGOA-related exports accounted for approximately $1.7 billion in 2025, representing about 10 per cent of South Africa’s exports to the United States and roughly one per cent of its total global exports.
The government has also intensified efforts to diversify export destinations, with opportunities being pursued across the African Continental Free Trade Area, Europe, Asia, the Middle East and other emerging markets.
The latest development has further reinforced calls for South African businesses to strengthen domestic production capacity, improve logistics efficiency and explore alternative international markets as the country navigates an increasingly uncertain global trading environment.
