Meluleki Nzimande | Partner | Webber Wentzel | mail me |
The prospect of South Africa losing its benefits under the African Growth and Opportunity Act (AGOA) understandably raises concerns.
Preferential access matters, particularly where exporters operate on tight margins. However, businesses should not respond to headlines alone. Instead, they should understand their exposure, preserve viable customer relationships and accelerate expansion into other markets.
This is not about minimising the challenges. Rather, it is about recognising that a policy setback can also prompt a stronger, more diversified export strategy. Looking beyond AGOA could help businesses turn this uncertainty into an opportunity for sustainable growth.
Start with the product, not the headline
The consequences of losing AGOA preferences will differ between products. Exporters should assess the product-specific Most-Favoured-Nation (MFN) duty that will become payable when South Africa’s removal from AGOA takes effect. This assessment should also consider additional United States of America (US) duties, freight and other costs. Businesses must then calculate the resulting landed price.
In July 2026, the US enacted section 301 duties on countries it deemed to have committed forced labour violations. These duties succeeded the section 122 emergency duties. The latter had replaced the “liberation day” tariffs imposed in April 2025. Where section 301 duties apply at commercially prohibitive levels, they may effectively overwhelm the value of AGOA’s duty-free treatment. Losing the preference would then represent a smaller component of the overall tariff burden. Nevertheless, it would remain an unwelcome additional cost.
This distinction matters because the additional duties imposed by the first and second Trump administrations do not cancel out ordinary customs duties. Rather, their scale may mean that restoring AGOA access alone would not restore competitiveness. Therefore, looking beyond AGOA requires exporters to understand the full tariff environment, rather than focusing exclusively on preferential access.
Relationships can help preserve market access
Established supplier-buyer relationships remain valuable. Quality, consistency, reliability and confidence in a supplier’s performance can influence purchasing decisions alongside price. Where the incremental duty is relatively modest, an exporter and its customer may find a commercially workable way to mitigate the additional cost.
Some exporters may absorb part of the increase. Similarly, some buyers may accept higher prices or even pass them on to consumers. However, businesses should not assume either outcome. The scope for adjustment depends on several factors, including margins, volumes, exchange rates and the strength of the relationship.
Citrus (orange) provides a useful example. Competitors such as Peru and Chile benefit from shorter transit routes to the US. Nevertheless, South African suppliers may still have an opportunity to retain US market access. This is particularly relevant because the AGOA benefit, which involved a waiver of a 1.53% tariff, was modest to begin with. Harvesting seasons also differ.
It would be surprising if South African exporters could not accommodate such a modest cost increase. They could do so by sacrificing some margin or optimising their supply chains and production processes. In addition, they should leverage existing strengths. These include dependable service, quality, established customer confidence and off-season supply.
Those strengths do not eliminate freight disadvantages or prohibitive tariffs. However, they justify a careful assessment rather than an automatic decision to withdraw. This is another reason to look beyond AGOA’s immediate tariff implications and consider the wider commercial value of established relationships.
Exporters should engage buyers early. They should support these discussions with realistic cost models that include potential burden-sharing arrangements. A clear understanding of contractual responsibilities is equally important.
Diversification is an opportunity to grow
Protecting US business and developing new markets are complementary strategies. South Africa need not abandon established customers to reduce its dependence on any single destination. Instead, businesses should look beyond AGOA and build a more diversified export base.
The African and European markets should form a central part of that effort. South Africa already has preferential market access arrangements with these regions. Businesses should identify demand for their products, cultivate distribution partnerships and assess whether available trade preferences improve their commercial position. However, they must check product coverage, rules of origin and practical border arrangements before factoring preferential access into their pricing.
China, India, the Middle East and other global markets also warrant focused attention. Existing trade routes and links provide a starting point. However, a shipping route does not create a customer. Exporters need to identify suitable buyers, understand local business cultures and invest in relationships.
Market development also requires attention to product standards, import approvals, payment security and delivery reliability. Diversification should be a deliberate growth strategy, not merely an attempt to redirect unsold stock. A meaningful strategy beyond AGOA must focus on sustainable demand and profitable market opportunities.
A useful first step is to rank products and customers by exposure, profitability and growth potential. This exercise can distinguish US orders worth defending from opportunities better pursued elsewhere. It can also help businesses prioritise investment in distribution, compliance and logistics. This is preferable to spreading resources too thinly across unfamiliar markets without a clear route to profitable sales and repeat business.
Industry and government have complementary roles. Co-ordinated market promotion, practical assistance with access barriers and stronger trade routes can support exporters. Businesses must then translate these opportunities into sustainable commercial relationships.
Keep the door open without waiting
Seeking reconsideration of an exclusion decision remains worth exploring. However, businesses must confirm any formal appeal or review mechanism against the actual decision and applicable framework. A successful challenge cannot be assumed.
Annual eligibility reviews provide opportunities to make the case for renewed access. However, an annual review does not guarantee reinstatement or relief from additional duties.
Major policy amendments may prove more achievable after the current administration leaves office, particularly following the recent midterm election results. The Democrats’ midterm election victory presents an immediate opportunity. However, reversing the decision to remove South Africa from AGOA may prove difficult. President Trump effected the removal through an executive decision.
Nevertheless, the decision could face increased scrutiny as part of broader efforts by the Democrats to pressure the administration into mending strained trade relations. It would therefore be strategic for South Africa to start building bipartisan relationships with the US Congress urgently.
However, all these options represent political possibilities, not a legal timetable. Export strategies should not depend on political variables. Businesses must continue exploring opportunities beyond AGOA while keeping the possibility of renewed preferential access open.
A more resilient export future
The practical response is neither complacency nor pessimism. Instead, exporters must distinguish manageable incremental costs from structural barriers. They must also protect valuable relationships and pursue new customers with purpose.
For South African exporters, a broader footprint across Africa and the wider world could turn today’s uncertainty into lasting commercial resilience. Ultimately, looking beyond AGOA is not simply about responding to the loss of preferential access. It is about building a more competitive, diversified and sustainable export future.
