By Lehlohonolo Lehana.
Minister of Trade, Industry and Competition Minister Parks Tau has responded to the United States (US) decision to remove South Africa from a preferential trade programme, insisting that the move will not bring trade between the two countries to an end.
US announced on Monday, 2 November, that it intends to terminate South Africa’s participation in the African Growth and Opportunity Act (AGOA) from 1 January 2027.
Washington cited concerns involving trade barriers, corruption, human rights and what it described as threats to US national security and foreign policy interests.
The minister’s response follows a notification from US Trade Representative Jamieson Greer, who said President Donald Trump had found that South Africa’s government was engaging in practices inconsistent with AGOA’s eligibility requirements.
US also raised concerns about South Africa’s tariff and non-tariff barriers, its efforts to combat corruption and bribery, and its relationships with governments viewed as concerning by the US.
The programme has provided eligible African countries with preferential, largely duty-free access to the American market since 2000. South Africa has been its biggest beneficiary, making the latest announcement a significant development for local exporters.
However, Tau says the decision needs to be viewed in the context of the wider economic relationship between the two countries.
The minister acknowledged the concerns facing businesses and workers linked to AGOA, but stressed that the programme represents only a portion of South Africa’s exports.
According to government figures, approximately 89% of South African exports to the US entered under ordinary World Trade Organisation most-favoured-nation terms in 2025. Around 10% benefited from AGOA, down from 28% in 2024.
Those AGOA exports were valued at approximately US$1.7 billion last year, compared with US$4 billion in 2024. They accounted for roughly 1% of South Africa’s total global exports.
The broader relationship remains substantial. Tau said bilateral trade between South Africa and the US reached US$28.8 billion in 2025, while more than 600 American companies operate locally, supporting approximately 134 600 jobs.
South Africa also supplies 12 of the 50 minerals considered critical by the United States.
South Africa has 60 days to address the concerns raised, with government maintaining that it has made efforts to engage constructively with Washington.
The Bureau for Economic Research has cautioned that while diversifying export markets makes economic sense, it cannot simply replace established trading relationships overnight.
Different industries export different products to different destinations. An increase in one country’s coal exports to another market, for example, does little to protect seasonal employment in the citrus industry if access to the US becomes more expensive.
The impact could therefore be felt unevenly, with certain businesses and communities facing a much bigger challenge than the national export figures suggest.
For Tau, the priority is to protect those industries while keeping the door open to continued trade and investment with the United States.
He said South Africa would continue to pursue shared economic opportunities with Washington, while also protecting its national interests.