SOUTH AFRICA — The recent decision by the United States to remove South Africa from the African Growth and Opportunity Act (AGOA) trade program has triggered widespread evaluations of the economic impact of the AGOA removal across government, labor, and business sectors.
The South African government stated it has made extensive efforts to constructively address United States concerns regarding the trade pact. However, officials expressed concern that the US is introducing new issues that were not part of the bilateral negotiations initiated in 2025. The government acknowledged the potential impact on workers, businesses, and communities tied to the AGOA value chain, vowing to provide support, diversify exports, and save jobs. Officials emphasized that while AGOA remains important, it does not represent the totality of the economic relationship between the two nations.
The Congress of South African Trade Unions (Cosatu) voiced deep concern over potential job losses, urging swift government intervention to protect local industries. Highlighting that the domestic economy is growing at a mere 1%, Cosatu spokespersons argued for the expansion of trade relations with Asia, Europe, Latin America, and the rest of Africa to create jobs. They praised the Department of Trade, Industry and Competition (DTIC) for previous efforts in this area last year and called for further expansion.
Cosatu warned of an estimated 3,000 job losses, primarily in the agriculture and manufacturing sectors within western regions. Union representatives urged the DTIC to provide industrial subsidies and incentives to at-risk companies and communities to mitigate the fallout. Furthermore, South African firms are anticipated to face weaker US demand, particularly for key agricultural goods.
Conversely, Business Unity South Africa expressed optimism that the removal from the pact will not completely halt trade with the US or severely dent overall economic growth. Spokespersons for the business sector noted that losing AGOA equates to losing preferential access that saved approximately $55 million in tariffs last year. However, they calculated that the exclusion will only add between 3.6% and 6% to the tariffs on the affected goods, describing this as a minor increment compared to the tariffs already in place.
