South Africa Faces Higher US Trade Costs Post Agoa Exit

South Africa is encountering increased trade costs with the United States following its exclusion from the African Growth and Opportunity Act (Agoa). Losing access to Agoa will raise the cost of conducting business with the world's largest economy, despite alternative trade provisions.

US President Donald Trump informed South African President Cyril Ramaphosa that the country would be excluded from Agoa provisions starting next year. The country’s exports to the US are now expected to be administered through the Generalised System of Preferences (GSP) and the World Trade Organisation’s (WTO’s) most favoured nation (MFN) provisions.

Saul Levin, executive director of Trade and Industrial Policy Strategies, stated that while exclusion from Agoa does not terminate all trade between South Africa and the US, the act provided helpful provisions to exporters in strategic sectors. He noted that the removal of Agoa benefits is small compared to the earlier Trump tariffs.