Last week United States (US) President Donald Trump signed into law an extension of the African Growth and Opportunity Act (AGOA), keeping duty-free access to the US market open for more than 30 African countries until the end of 2028. For over a year, Republican Senator John Kennedy and US Trade Representative Jamieson Greer had both floated cutting South Africa out of the programme entirely, citing its ties to China, Russia and Iran. Neither proposal made it into the law Mr Trump signed.
South African policymakers and exporters can breathe; they shouldn’t celebrate for too long. While AGOA’s survival removes one source of risk, it doesn’t address the reasons South Africa’s economy struggles to grow (Stats SA data released on 8 September showed the economy contracted 0.2% in Q2:2026, following 0.4% growth in Q1:2026), and it should not be treated as evidence that the country’s trade position is secure.
AGOA’s main remaining value is narrow. It waives the Most Favoured Nation duty – the baseline tariff World Trade Organisation members charge each other – on top of other US tariffs. For South African vehicle exporters, this cuts the total tariff on cars sold into the US from 27.5% to 25%. That’s a meaningful saving, and it matters to automotive manufactures and the component suppliers that depend on vehicle exports. But it is a saving on top of a punishing base. The Section 232 tariff of 25% on vehicles, parts and aluminum remains in place regardless of AGOA. A separate 12.5% tariff tied to forced labour allegations now covers most other South African exports to the US, including wine and table grapes, neither of which qualifies for the exemptions given to citrus, nuts, guavas, mangoes and papayas.
South African vehicle exports to the US dropped from R32 billion in 2024 to R18 billion last year as these tariffs took hold. AGOA’s extension does not reverse that. It helps in terms of preventing a bad situation from getting worse, but not much more than that.
The trade relationship with the US remains lopsided in ways that have little to do with AGOA. Measured by value, more than half of South Africa’s exports to the US are precious metals like gold and platinum. These carry no tariff at all, under AGOA or otherwise, because commodities of this kind are typically exempt from the tariff schedules Mr Trump has imposed. South Africa’s continued trade surplus with the US, roughly R92 billion in exports against R84 billion in imports so far this year, rests heavily on this one exemption. Remove precious metals, and the picture for manufactured exports, especially vehicles, looks considerably worse.
The AGOA win (for select sectors and businesses) aside, none of this touches the deeper problems holding back growth. Manufacturing production fell 4.3% year on year in May, with seven of the ten manufacturing divisions in decline. This has nothing to do with US trade policy and everything to do with conditions at home: unreliable electricity and water supply, ports and rail networks that cannot move goods efficiently, and municipalities, Johannesburg foremost among them, that cannot deliver basic services to the businesses operating within their borders. No US trade concession fixes a grounded municipal vehicle fleet or a R2.1 billion funding gap in the country’s economically important city.
There is a substantial risk of complacency. AGOA’s extension will be presented by some as proof that South Africa’s trade relationships are healthy and that the country’s export sector has a stable foundation to grow from. That reading mistakes the absence of a specific external threat for the presence of a sound domestic growth strategy.
South Africa can welcome the extension for now but needs to move with the harder work AGOA was never going to do for it. That means fixing the port and rail bottlenecks that limit how much South African manufacturers can actually export, stabilising municipal finances so businesses can operate reliably, and improving the ease of doing business enough that investment does not depend on which trade programme happens to still exist. AGOA gives South African exporters a lifeline into 2028; what happens to the economy underneath that lifeline is still entirely up to South Africa.
[Image: US and African flags]
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