South Africa’s removal from the African Growth and Opportunity Act will have a “minimal impact” on the economy as a whole. That is the view of business leaders and economists quoted by Moneyweb.
They said the decision by the Trump administration is still likely to cost some jobs in farming and car manufacturing.
“While only about 10% of South Africa’s exports to the US are currently subject to Agoa, South Africa’s exit still puts thousands of jobs at risk in these sectors,” said Raymond Parsons, an economics professor at North West University’s Business School.
Parsons spoke on Tuesday, a day after the decision was announced.
Business Unity South Africa, the country’s largest business lobby group, also warned of job losses. “Jobs will be lost, the last thing South Africa needs in the midst of an employment crisis,” BUSA said.
“But perspective matters. The number of jobs affected is likely to be in the range of a few thousand,” the group said.
BUSA said firms are “likely to experience weaker US demand, especially in key agricultural goods.” It said weaker sales in the US are likely to be offset by “deep underlying strengths.”
According to BUSA, farm and food exports to the US fell by 22% in the year to August. Sales to other markets rose by 9% to $15.7 billion over the same period.
The group said that rise was nearly ten times the size of the US loss. It said a bigger worry was that “relations between our two governments deteriorate further.”
The government in Pretoria played down the likely impact. It said the amount of trade directly affected by Agoa was small.
Financial markets took the news calmly. “The disappointment was to a large extent anticipated,” said Alvin Chawasema, head of fixed income at Otto1890 in Johannesburg.
Chawasema pointed to bigger concerns for investors, including the ongoing Iran war. “It could well be that markets are rationally assigning some residual probability to further negotiation,” he said.
Higher trade levies imposed by President Donald Trump since his return to power had already reduced Agoa’s value to South Africa, according to the report.
“Much of the benefit of preferential access has already been eroded by existing US tariffs,” the Bureau for Economic Research said in a note.
The bureau added that the effect on some manufacturers and suppliers “may be substantial even if the aggregate impact on the economy is relatively limited.”
Citrus farmers will now pay the normal US duty, which is generally between 1.5 and 2.5 US cents per kilogram. This was according to Boitshoko Ntshabele, chief executive of the Citrus Growers’ Association of Southern Africa.
Ntshabele said exporters of some citrus types face a “severe disadvantage to competitors like Peru and Chile, who benefit from trade agreements as well as shorter transit times.”
Car makers felt the effect of US tariffs earlier, in 2025. Mercedes-Benz has exported its C-Class model to the US from its Eastern Cape plant since 1997.
Exports from that plant fell sharply in the third quarter of 2025 and have not recovered, according to industry data. The company is now looking for a partner to share the plant because it has too much capacity.
BMW once exported the Pretoria-built 3-Series to the US. In 2018 it switched to making the X3 SUV for other markets.
BUSA said South Africa will lose its preferential access to the US market in the new year.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.