South Africa faces uncertain trade future as US-China tensions escalate! Despite US President Donald Trump recently reversing 30% tariffs on South African exports, Washington’s ongoing trade war with China is expected to ripple across the global economy—placing billions of rands worth of South African trade in jeopardy.
At the heart of this looming crisis lies South Africa’s potential loss of preferential access to US markets through the African Growth and Opportunity Act (AGOA). In 2024 alone, AGOA enabled South Africa to export goods worth over R71 billion to the United States.
US-China tensions
According to Frederick Mitchell, chief economist at Aluma Capital, AGOA has played a vital role in strengthening South Africa’s international trade position. However, with the intensifying US-China standoff, smaller economies like South Africa may become collateral damage.
Mitchell warned that South Africa’s close alignment with China, particularly through its membership in the BRICS bloc, could jeopardize its standing with Washington. “The US increasingly views South Africa as acting against its strategic interests,” Mitchell said. “This places AGOA—and the preferential treatment it provides—squarely in the firing line.”
Should AGOA be revoked, or if tariffs on South African exports are reimposed, Mitchell predicts significant disruptions across various sectors. “Data shows that South Africa’s exports to the US under AGOA have grown from R31.47 billion in 2019 to a projected R71.56 billion in 2024. Cancellation could cause a sharp decline, especially in key sectors like agriculture, textiles, and manufacturing.”
These sectors have thrived under AGOA’s duty-free access, but without it, South African goods could face high tariffs, making them less competitive globally.
Mitchell’s analysis shows that a large share of South Africa’s AGOA exports include agricultural products, mineral commodities, vehicles, and chemicals. These categories would be among the hardest hit if preferential trade status is lost.
According to the economist, AGOA accounted for 46% of South Africa’s total exports to the US in 2024, with non-AGOA exports making up the remaining 54%. “In total, South Africa exported R156.7 billion worth of goods to the US last year, with nearly half of that facilitated by AGOA,” he said.
Since 2019, South Africa’s AGOA-supported exports have steadily increased—from R31 billion in 2019 to R54 billion in 2022, R64 billion in 2023, and now an estimated R71.5 billion in 2024. Over five years, these exports have totaled nearly R300 billion.
Mitchell emphasized that the evolving global trade environment presents both challenges and opportunities. He urged South Africa to diversify its trade relationships and reduce dependency on any single global power.
“President Cyril Ramaphosa has already indicated the need for trade diversification,” he said. “But beyond diplomatic moves, South Africa must prioritize internal development by investing in infrastructure, technology, and industrial reform.”
Mitchell concluded with a message of cautious optimism. “By building resilience and seeking new trade opportunities, South African industries can weather the storm and even find new paths to growth amid global uncertainty.”
