By Nellie Peyton
JOHANNESBURG, Nov 3 (Reuters) – South African exporters are weighing potential job losses and squeezed margins after Washington moved to end the country’s duty-free access to the US market, though economists and analysts said the broader economic fallout was likely to be limited.
Washington announced on Monday that it would suspend South Africa and Rwanda from the African Growth and Opportunity Act (AGOA), its flagship duty-free trade programme for sub-Saharan African countries, from January 2027.
It said both countries had been declared ineligible due to practices that threaten US interests.
South Africa had been the largest beneficiary of the programme, using it to export car parts, fruit and wine to the US for two decades.
ORCHARDS PLANTED FOR US MARKET
“Entire orchards have been planted specifically for the US market,” said Gerrit van der Merwe, chairman of the Citrus Growers’ Association of Southern Africa, adding that fruit cannot be diverted to other markets due to different health requirements and consumer preferences.
“It is too early to say how many, but some people will unfortunately lose their jobs when this happens,” he said.
South African wine producer Ken Forrester, who exports to the US, said he did not expect job losses at his own business but that it would hurt the industry.
“Without AGOA, we lose that competitive advantage,” he said, adding that it would be harder to compete with exporters such as Chile, Argentina, and Europe.
“It’s a problem. It’s really going to cause some shrinkage,” Forrester said at his vineyard in Stellenbosch.
FEAR OF JOB LOSSES
With one of the highest unemployment rates in the world, South Africa will feel any losses, the country’s largest trade union, COSATU, said.
“We cannot afford to abandon a single worker, business, industry or community,” it said, blaming white interest groups for spreading lies that led to South Africa’s exclusion.
President Donald Trump has targeted the country largely due to what he says is its persecution of white people, which Pretoria says is a false narrative spread by fringe groups.
“It is long overdue that … proponents of the white persecution myths, appreciate the very real damage that their endless lobbying of and antics in the US have done to bilateral relations,” COSATU said.
But agricultural economist Wandile Sihlobo said there had been talk of removing South Africa from AGOA for more than a decade because it is an upper-middle-income country and should have a more reciprocal trade agreement with the US.
“Being excluded or graduating out of AGOA does not necessarily mean that South Africa loses market access to the US. All this means is that … there will be an additional tariffs,” he said.
For most products it will be an additional tariff of around 3.4%, he said. Almost 90% of South Africa’s exports to the US already fall outside AGOA.
Business lobby group Business Unity South Africa said the number of job losses was likely to be in the range of a few thousand.
GOVERNMENT TO PROVIDE SUPPORT
Rwanda’s trade with the US is much smaller than South Africa’s. The US was its 10th biggest trading partner in 2024, according to the National Institute of Statistics of Rwanda.
Rwandan government officials did not respond to requests for comment about the suspension.
The US, Mexico and Canada market accounted for about 8% of South Africa’s automotive exports in 2025, with the US taking the largest part, according to industry body naamsa. But automotive exports to the US were already hit with new tariffs last year, effectively cancelling out AGOA benefits.
“This is far from a disaster. The numbers speak for themselves,” said South Africa’s trade ministry spokesperson on X.
The ministry said it was working with affected industries to assess the impacts and provide support, as well as accelerating the diversification of South Africa’s export markets.
(Reporting by Nellie Peyton; Additional reporting by Esa Alexander, Nelson Banya, Nqobile Dludla, Sfundo Parakozov, Alexander Winning, Ammu Kannampilly; Editing by Alison Williams)
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