South Africa shoots itself in the foot
While economists and analysts are split over the actual impact and urgency of South Africa losing access to the African Growth and Opportunity Act (AGOA), the outcome is far from a surprise.
Not only had South Africa’s participation in the programme been in question since 2015, but there was also no real effort by the government to avoid the result.
Kruthum Managing Director Peter Attard Montalto believes the impact of losing AGOA has been overstated.
As with other commentators more grounded in the numbers, he noted that there will be an impact, but nothing “end of the world”.
As per the Department of Trade, Industry and Competition (DTIC), 89% of South African exports to the United States in 2025 entered under ordinary trade terms.
Approximately 10% entered under AGOA, down from 28% in 2024.
AGOA exports were valued at approximately US$1.7 billion in 2025, down from US$4 billion in 2024, representing only about 1% of South Africa’s total global exports.
“The key point on AGOA is that it removes one chunk of preferential access, but access to the US market remains,” Attard Montalto said.
He added that the US market is fast-growing and wants not just South Africa’s goods, but also its services, and that companies can keep looking for opportunities without a leg up.
But even with a minimal impact on South Africa as a whole, Attard Montalto described the DTIC’s messaging around AGOA as “problematic”.
He said that the department’s messaging has tried to suggest that the loss of AGOA was a “negotiating disagreement”, and that it was the US trade representative’s fault for not negotiating clearly on set terms.
“Yet the trade representative was never negotiating over this exit; it was a wider administration choice based on punitive accounts of South Africa’s broad policy platform, including its foreign policy stance,” the analyst said.
“Framing it as a deal that slipped away lets the department off the hook and leaves business unprepared for what comes next,” he said, warning that further punitive measures were coming.
Attard Montalto added that the government has also repeatedly made out as if it were actively engaging with the United States to manage AGOA.
However, “these efforts were limited, often at junior to mid-ranking level and not where decisions are actually made,” he said.
“In any case, there was never any real prospect of South Africa avoiding…the loss of AGOA preferential access,” he said.
This is because the foundational policy concerns raised by the United States—such as BEE reform—were never seriously on the table.
While some reforms are taking place, they would also never be enough to satisfy the United States.
“Put those domestic choices together with a US administration that laid out its view of South Africa early in its term, and this moment was close to inevitable,” Attard Montalto said.
An own-goal reckoning
Even as many look to the numbers to downplay the impact of losing AGOA, others are focused on those the loss will actually affect.
Aluma Capital Chief Economist Frederick Mitchell said that being removed from the programme will mean South Africa loses a competitive edge in niche exports and puts thousands of jobs at risk.
While the job losses have also been said to be ‘overstated’, any job losses in a country where unemployment sits at crisis levels of 33.6% should not be easily dismissed.
“The loss of preferential treatment directly exposes our most labour-intensive and high-value sectors,” Mitchell said.
These include automotive manufacturing in the Eastern Cape and Gauteng; citrus, table grapes, and deciduous fruit farming in the Western Cape; and advanced metallurgy and agro-processing.
“Overnight, local exporters will face prohibitive import tariffs, radically eroding margins and pricing South African goods out of the world’s largest consumer market,” he said.
The blow also comes at a time when South Africa’s domestic industries are “under intense siege” from a massive wave of cheap Chinese imports.
“Influxes of heavily subsidised vehicles, industrial machinery, textiles, and electronics, amounting to an estimated R165 billion competitive threat, are squeezing local producers out of their home market,” he said.
“South African manufacturers, burdened by high local electricity costs, municipal logistics failures, and rigid regulatory frameworks, are now fighting a two-front war: losing duty-free Western export markets abroad while being hollowed out by Asian competition at home.”
The result is rapid de-industrialisation, he said.
The economist said that the South African government cannot afford to “sleepwalk” through the crisis, and needs to put ideology aside to stand with South Africans at large.
He said a high-level diplomatic and business delegation should be sent to Washington to deal with the issues.
“Negotiate pragmatic bilateral trade solutions, address mutual security and policy concerns, and preserve preferential US market access,” he said.
“Ideological victories will offer zero comfort to the hundreds of thousands of South African families who stand to lose their breadwinners to the harsh reality of factory closures.”
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