Government says diversification is key as US withdraws Agoa benefits

The South African government says it will press ahead with efforts to diversify export markets after the US gave notice of its intention to withdraw South Africa’s benefits under the African Growth and Opportunity Act (Agoa) from January 1 2027.

Minister of trade, industry and competition Parks Tau said the decision does not define the broader relationship between South Africa and the US. “However, a solution depends on the willingness of both parties to find solutions.

“At the same time, government will support affected sectors, protect South Africa’s national interests and continue pursuing trade, investment and shared economic opportunities with the US,” he said.

Ministerial spokesperson Kaamil Alli said officials are working closely with affected industries to assess the implications and will continue to provide appropriate support on a company-to-company basis.

Government will continue its engagements with social partners to optimise support measures aimed at improving resilience and sustainability of productive sectors whilst diversifying exports and protecting jobs.

“As a responsible government, South Africa has proactively retained measures that were availed as a response to the reciprocal tariffs,” he said.

Alli said Agoa remains important to South Africa, but it does not constitute the totality of the economic relationship between South Africa and the US.

In 2025 approximately 89% of South African exports to the US entered under ordinary World Trade Organisation most favoured nation terms, while approximately 10% entered under Agoa, down from 28% in 2024. Agoa exports were valued at about $1.7bn (about R28.28bn) in 2025, down from $4bn in 2024.

“South Africa supplies 12 of the 50 minerals regarded as critical by the US, 70% of US isotopes used among others in cancer treatments, sources inputs from the US on goods manufactured for exports to the US under Agoa such as autos and boat building. South African companies are also invested in the US economy and the loss of Agoa will undermine these investments and negatively affect existing value chains.”

Alli said the government will continue to accelerate the diversification of South Africa’s export markets.

“Through its cabinet-approved Industrial Development Strategy and Butterfly Strategy, South Africa is pursuing market opportunities across the African Continental Free Trade Area, India, Sadc, the European Union, the United Kingdom, Asean, Mercosu and China. New market opportunities have also been secured for South African citrus, avocados, grapes and apples,” he said.