By Thebe Mabanga
Trade and industry minister Parks Tau has welcomed the United States House of Representatives’ decision to extend the African Growth and Opportunity Act (AGOA), but South Africa still faces significant hurdles to secure its continued participation.
On Tuesday, the lower house of the United States Congress passed the bill to extend AGOA for another three years, to 2028, by 340 votes to 54.
“While South Africa, together with other AGOA-eligible countries, have been advocating for a long-term renewal of AGOA with all countries retained in the programme, the current renewal, while short, provides the necessary relief to companies in the context of the tariffs implemented by the United States,” Tau said in a statement, referring to the Liberation Day 30% tariffs imposed on a range of countries, including South Africa, last August.
“This will provide certainty and predictability for African and American businesses that rely on the programme.”
The bill must now proceed to the Senate for its concurrence before heading to President Donald Trump for approval.
Both steps may prove tricky for South Africa.
In its X (formerly Twitter) account, the Senate Foreign Relations Committee said South Africa’s foreign policy “hides behind claims of Non-Alignment” while the country forges close relations with the United States’ “chief adversaries”.
This was in reference to the military drill held in Simon’s Town, which was to include Iran, but the country cancelled its participation at the last minute.
“Any promise or deal this government offers Washington is meaningless when its actions signal open hostility toward the United States,” the committee said of South Africa.
“President Trump is right to treat the South African government for what it is: an adversary of America.”
This suggests hostility towards SA when the bill reaches the Senate.
For his part, Trump announced that any country that does business with Iran will face an additional 25% tariffs in addition to any existing tariffs.
Tau’s spokesperson, Kaamil Alli, said South Africa is not expecting any additional tariffs at this stage.
Tau focused on the positives of the announced extension, arguing that the renewal of AGOA would complement and support the implementation of the African Continental Free Trade Area (AfCFTA), the creation of regional value chains, and American businesses that rely on inputs and products imported into the US under the programme.
He said AGOA supports thousands of jobs in both countries and contributes to stable supply chains across key sectors, notably automotive, shipbuilding, agriculture, chemicals and apparel.
According to South African Revenue Service (SARS) data, total bilateral trade between South Africa and the US amounted to $15 billion in 2024, with South Africa’s exports valued at $8 billion and imports at $7 billion, resulting in a trade surplus of $1 billion.
South Africa’s exports to the US are largely commodity-based.
In the first three quarters of last year, exports stood at $5.9 billion.
Under AGOA, South Africa’s major exports include automotives, ferro-alloys, citrus, jewellery, nuts, chemicals, wines, engines and turbines, as well as ships and boats.
The US is South Africa’s third-largest export destination after China and the European Union, accounting for about 8% of total exports.
According to the Department of Trade, Industry and Competition (DTIC), South Africa is the largest sub-Saharan African importer of US goods, the biggest source of African foreign direct investment into the US, and a key supplier of raw materials to several US supply chains, including the aerospace and defence industries — underscoring the mutual dependence created by AGOA.
Despite strained diplomatic relations, the two countries are currently engaged in negotiations over Agreement on Reciprocal Tariffs.
As part of these talks, South Africa has offered to purchase $12 billion worth of liquefied natural gas from the US over ten years, among other concessions.
The US has yet to formally respond to the proposal.
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