US pulls South Africa's AGOA benefits from January 2027, and 134,600 jobs sit in the balance

The United States intends to withdraw South Africa’s benefits under the African Growth and Opportunity Act (AGOA) from 1 January 2027, with a 60-day advance notice period, and the government has acknowledged the announcement while insisting the relationship is bigger than the programme.

Trade, Industry and Competition Minister Parks Tau addressed the implications of the decision, affirming the country’s commitment to what he called a constructive and balanced partnership.

“This decision does not define the broader relationship between South Africa and the United States, however, a solution depends on the willingness of both parties to find solutions,” Tau said.

He said the government is focused on protecting the interests of sectors affected by the decision. “At the same time, government will support affected sectors, protect South Africa’s national interests and continue pursuing trade, investment and shared economic opportunities with the United States,” he said.

The numbers in the government’s own statement show how much of the relationship already sits outside AGOA. In 2025, about 89% of South African exports to the US went under ordinary World Trade Organisation most favoured nation terms, while only about 10% were AGOA exports, down from 28% in 2024.

AGOA exports totalled nearly US$1.7 billion in 2025, down from US$4 billion in 2024, and accounted for roughly 1% of South Africa’s total global exports. Bilateral trade reached US$28.8 billion in 2025.

Those AGOA-linked value chains are where the decision lands. Government said it recognises the concerns the decision raises for workers, exporters, businesses and communities connected to AGOA-supported value chains, and that the impact will vary across different sectors. It said it is actively working with affected industries to assess the full implications.

The statement also records the American presence on the South African side of the ledger. Over 600 American companies operate in South Africa and support approximately 134,600 jobs, according to the government’s figures.

On the negotiations, government said South Africa made extensive efforts to respond constructively to US concerns, including offering additional concessions beyond those agreed in 2015 through the proper channels. It said those concessions respect due process, safeguard South Africa’s biosecurity and constitutional imperatives and its obligations under World Trade Organisation rules.

It said the US has now introduced new issues outside the scope of the negotiation process that began in 2025. “It is, however, unfortunate that the US is now raising new issues that have not been the basis for discussions as part of the negotiations process that commenced in 2025,” government said in its statement.

“AGOA still holds significance for South Africa but does not represent the entirety of the economic relationship between the two countries,” the statement said.

Tau reaffirmed South Africa’s dedication to a balanced and mutually beneficial partnership. “South Africa has affirmed its commitment to a balanced and mutually beneficial partnership that supports preferential trade, beneficiation of critical minerals at source and investment promotion.”

He also set out the limits of what South Africa will trade away. “As a sovereign constitutional democracy, South Africa will uphold its constitutional responsibilities, transformation objectives, and international obligations, while seeking practical solutions to expand trade and investment,” he said.

The statement points to what South Africa supplies to the US: 12 of the 50 minerals Washington deems critical, and 70% of US isotopes used in cancer treatments. It also notes that South Africa sources inputs from the US for goods manufactured for export under AGOA, such as automobiles and boat building, and warns that South African investments in the US economy may be adversely affected by the withdrawal, potentially undermining existing value chains.

Government said it remains committed to diversifying export markets aggressively. Its Cabinet-approved Industrial Development Strategy and Butterfly Strategy are targeting new opportunities across the African Continental Free Trade Area, India, SADC, the European Union, the United Kingdom, ASEAN, MERCOSUR and China. New markets have also opened up for South African citrus, avocados, grapes and apples.

This report is drawn from the government’s statement as published by SAnews (South African Government News Agency), which summarises the government’s position rather than reproducing the full negotiating record: https://www.sanews.gov.za/south-africa/sa-responds-us-decision-agoa-benefits-withdrawal