{"id":882640,"date":"2026-11-03T16:30:31","date_gmt":"2026-11-03T14:30:31","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=882640"},"modified":"2026-11-03T16:30:34","modified_gmt":"2026-11-03T14:30:34","slug":"businesses-in-south-africa-downplay-loss-of-agoa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/882640\/businesses-in-south-africa-downplay-loss-of-agoa\/","title":{"rendered":"Businesses in South Africa downplay loss of AGOA"},"content":{"rendered":"\n

The Trump administration\u2019s decision to exclude<\/a> South Africa from the African Growth and Opportunity Act will have a \u201cminimal impact\u201d on the economy as a whole, according to business leaders and economists.<\/p>\n\n\n\n

It will, however, likely result in some job losses in the agriculture and automotive industries. <\/p>\n\n\n\n

\u201cWhile only about 10% of South Africa\u2019s exports to the US are currently subject to AGOA, South Africa\u2019s exit still puts thousands of jobs at risk in these sectors,\u201d Raymond Parsons, an economics professor at North West University\u2019s Business School, said on Tuesday, a day after the decision was announced.<\/p>\n\n\n\n

Pretoria played down the likely impact of the exit, noting that the scale of trade directly affected by AGOA was small. South Africa\u2019s financial markets took the news in their stride.<\/p>\n\n\n\n

\u201cThe disappointment was to a large extent anticipated,\u201d said Alvin Chawasema, head of fixed income at Otto1890 in Johannesburg, who pointed to larger concerns for investors, including the ongoing Iran war.<\/p>\n\n\n\n

\u201cIt could well be that markets are rationally assigning some residual probability to further negotiation.\u201d<\/p>\n\n\n\n

Higher trade levies imposed by President Donald Trump since he returned to power last year have in any case diminished AGOA\u2019s value to South Africa.<\/p>\n\n\n\n

\u201cMuch of the benefit of preferential access has already been eroded by existing US tariffs,\u201d the Bureau for Economic Research said in a note.<\/p>\n\n\n\n

But it added that the consequences for some manufacturers and suppliers \u201cmay be substantial even if the aggregate impact on the economy is relatively limited.\u201d<\/p>\n\n\n\n

The loss of preferential access \u201cexposes South African citrus exports to the applicable US rate of duty, generally between 1.5 and 2.5 US cents per kilogram,\u201d said Boitshoko Ntshabele, chief executive officer of the Citrus Growers\u2019 Association of Southern Africa. <\/p>\n\n\n\n

But exporters of certain citrus varieties are at a \u201csevere disadvantage to competitors like Peru and Chile, who benefit from trade agreements as well as shorter transit times,\u201d he said in a statement.<\/p>\n\n\n\n

Trouble for some, but not for everyone<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Business Unity South Africa, the nation\u2019s largest business lobby group, said firms are \u201clikely to experience weaker US demand, especially in key agricultural goods.\u201d <\/p>\n\n\n\n

But anticipated weaker sales in the US are likely to be offset by \u201cdeep underlying strengths.\u201d<\/p>\n\n\n\n

\u201cIn the year to August, farm and food exports to the US fell by 22%, but sales to other markets rose by 9% to $15.7 billion\u2014an increase nearly ten times the US loss,\u201d BUSA said in a statement, noting market diversification in response to Trump. <\/p>\n\n\n\n

\u201cThe wider commercial, economic and investment relationship has not deteriorated, and we see the loss of preferential access in the new year as having no bearing on underlying ties.\u201d<\/p>\n\n\n\n

For South Africa-based automotive manufacturers, the Trump administration\u2019s applications of tariffs in 2025 were more immediate for Mercedes-Benz Group AG, which has exported the low-margin C-Class model to the US from its plant in the Eastern Cape province since 1997.<\/p>\n\n\n\n

Exports from the German manufacturer\u2019s facility slumped in the third quarter of 2025 and haven\u2019t recovered, according to industry body data, prompting the company to seek a partner<\/a> to share its plant due to overcapacity.<\/p>\n\n\n\n

BMW AG, which historically exported the Pretoria-built 3-Series compact sedan to the US, transitioned to manufacturing the X3 SUV for other markets in 2018.<\/p>\n\n\n\n

\u201cJobs will be lost \u2013 the last thing South Africa needs in the midst of an employment crisis,\u201d BUSA said. \u201cBut perspective matters: The number of jobs affected is likely to be in the range of a few thousand.\u201d<\/p>\n\n\n\n

A bigger concern was that \u201crelations between our two governments deteriorate further.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s removal from AGOA will have a \u201cminimal impact\u201d on the economy as a whole, according to business leaders and economists.<\/p>\n","protected":false},"author":59,"featured_media":861334,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2117626863128379521","_sma_facebook_post_id":"191437357620492_2259531091533956","_sma_instagram_post_id":"17916518751495868","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[18336,80],"class_list":["post-882640","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-agoa","tag-busa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/882640","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=882640"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/882640\/revisions"}],"predecessor-version":[{"id":882642,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/882640\/revisions\/882642"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/861334"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=882640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=882640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=882640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}