R70 billion disaster for South Africa

Despite US President Donald Trump reversing 30% tariffs on South African exports, Washington’s trade war with China will likely spill over to the rest of the world, and billions of rands worth of trade hangs in the balance.

Sitting on top of this pile is the potential and increasingly likely loss of access to US markets through the African Growth and Opportunity Act (AGOA), which enabled over R71 billion in exports in 2024.

According to Aluma Capital chief economist Frederick Mitchell, AGOA has been critical to bolstering South Africa’s trade.

However, if the US and China cement their war, trade barriers and shocks will catch smaller economies like South Africa in the crossfire.

Specifically, Mitchell said South Africa’s strategic alignment with China as a BRICS partner places it in a delicate position regarding US trade preferences and US international interests.

This puts AGOA directly on the firing range, making South Africa’s position in the Act extremely vulnerable. The United States already views the country as running counter to its interests.

Mitchell said that any cancellation of AGOA, or even re-imposing 30% tariffs on South African goods, could significantly disrupt local trade dynamics.

“Data reveals that AGOA has been instrumental in increasing South Africa’s exports to the US, with exports growing from around R31.47 billion in 2019 to a projected R71.56 billion in 2024,” Mitchell said.

“If AGOA were to be cancelled, stakeholders would be poised to witness a decline in these figures, particularly affecting sectors like agriculture, textiles, and manufacturing that significantly benefit from AGOA provisions.”

South Africa has a lot to lose

Mitchell’s analysis of South Africa’s exports to the United States shows that a significant portion consists of agricultural products like vegetables, prepared foodstuffs, mineral products, and precious metals.

Other major categories include vehicles, aircraft and vessels, and chemicals, which would also suffer a significant blow.

“The cancellation of AGOA could lead to increased tariffs, ultimately making South African goods less competitive compared to other nations,” he said.

According to Mitchell’s data, South Africa exported an estimated R71.5 billion through AGOA in 2024, accounting for 46% of total exports to the US that year.

R85.2 billion in non-AGOA exports accounted for 54% of the R156.7 billion total.

South Africa’s exports under AGOA have also been increasing over the years. In 2019, around R31 billion was traded under the Act. This shot up to R54 billion in 2022 and hit R64 billion in 2023.

The R71.5 billion estimate in 2024 is the highest yet, with the total over the period coming to just under R300 billion.

Mitchell said that the risks and challenges posed by the trade war should push South Africa to diversify its trade partners. President Cyril Ramaphosa has already made this a priority.

In addition, the economist said that South Africa should continue strengthening local industries—including through reforms and resolving infrastructure issues—and invest in tech and innovation to improve production.

“By building resilience and actively pursuing new opportunities, South African businesses can not only survive but also thrive in the face of challenges,” Mitchell said.

South Africa’s AGOA exports to the United States