South African factory workers brace for AGOA loss

For the South Africans who work in factories canning fruit, assembling vehicles and bottling wine for American shelves, the question hanging over the economy is a simple one: what happens to their paychecks if the country loses its preferential access to the United States market?

That question has moved from the margins to the center of national debate. Speaking to editors and reporters on October 19, President Cyril Ramaphosa acknowledged for the first time in such blunt terms that exclusion from the African Growth and Opportunity Act, or AGOA, is a scenario his government must confront. “I need, as president, to prepare us if it ever happens,” he said.

His candor reflects mounting anxiety in households and workplaces across the country. Unemployment already sits above 30%, and for families dependent on export-oriented sectors, the prospect of losing the trade arrangement that has underpinned their industries since 2000 is no abstraction. Lisette IJssel de Schepper, Chief Economist at the Stellenbosch-based Bureau for Economic Research (BER), told FORBES AFRICA that the pain would arrive quickly and close to home. “The most immediate consequences would be felt by export-oriented industries that have historically benefitted from AGOA, including agriculture and manufacturing…. Reduced competitiveness in the U.S. market could translate into lower export volumes, pressure on profitability and, ultimately, job losses,” she said.

Ramaphosa himself did not shy away from the scale of the blow. Addressing the hypothetical expulsion at the briefing, he described such an outcome as “devastating” for the economy, while insisting that South Africa would not be alone in that experience. “We are not the first and only country to be taken out of AGOA. And I believe we will not be the last,” he said.

Meanwhile, the stakes have been sharpened by a diplomatic relationship that has frayed badly. In May of last year, Ramaphosa traveled to Washington to try to resolve President Donald Trump’s unproven genocide claims. Relations took a further knock when Trump declined his invitation to the 2025 G20 summit in Johannesburg in November, disrupting the traditional handover ceremony between the two nations. This year Trump will chair the G20 in Miami, and he has claimed he may bar South Africa from the event entirely.

AGOA itself has sat in a state of uncertainty amid this friction. The arrangement, which South Africa has benefited from since its inception in 2000 under U.S. President Bill Clinton, had lapsed temporarily before a one-year deal was introduced in February this year. That deal was later extended to December 2028 after a vote in the U.S. Congress to keep South Africa in the arrangement, though the final say rests with Trump.

Economists caution that some of the damage is not hypothetical at all. It has already begun. IJssel de Schepper points to what she calls the “broader deterioration” of South Africa-U.S. trade relations, noting that the question of how useful AGOA remains has shifted in recent months. “The tariffs introduced over the past year have eroded many of the benefits associated with AGOA, so some of the economic consequences are already being felt,” she said.

Even so, there is little doubt that full exclusion would deepen the strain. Jee-A van der Linde, Senior Economist at Oxford Economics Africa, believes the fallout would “further erode South Africa’s manufacturing base.” The goods South Africa sends across the Atlantic are heavy and developed, ranging from cars to wine, precisely the kinds of products that depend on tariff-free entry to remain competitive.

Nor does van der Linde see an easy pivot elsewhere. Asked whether turning to alternative markets could offset the loss, he said he does not currently see clear positives. China offers a cautionary example. South Africa welcomed Beijing’s zero-tariff scheme in June last year, but the Asian powerhouse mostly orders raw materials rather than the finished goods at the heart of the AGOA trade. As for the African continent itself, van der Linde sees slim room for expansion. “I don’t think there’s sufficient regional demand for pricier goods compared to the likes of China,” he said.

That leaves a country already struggling to build momentum with even less margin for error. GDP growth has plateaued at around 1% over the past few years, and the government’s task of accelerating that trajectory is difficult enough. An AGOA omission, economists and the president alike suggest, would only steepen the climb. The first to feel it would be the workers and communities whose livelihoods are tied to what South Africa makes and ships abroad.