It has been all too common to put the dramatic deterioration in the South African government’s relationship with the United States government down to misunderstanding, miscommunication, or a lack of skillful dealmakers. But it is none of these.
The reality is that Washington and Pretoria are deeply at odds, with numerous mutually incompatible interests. Even the best diplomatic will in the world must reckon with this reality.
What the ANC-dominated state regards as not just non-negotiable but vital — race restrictions on economic participation, an extractive and socialist state apparatus, and anti-US foreign policy alignment — Washington is no longer prepared to tolerate in pursuit of its own international agenda.
When interests diverge so substantially, dealmaking often becomes possible only after confrontation has reset terms. Seeking to avoid a substantive reset, the Ramaphosa administration has pinned its hopes on delay tactics and waiting out the second Trump administration. But all indications are that this will not work with an insistent US administration clearly willing to escalate with both general measures, like import tariffs, and targeted measures, like excluding the South African government from participation in this year’s G20.
The fundamental nature of the dispute explains why everything keeps pointing to sustained and intensified retaliatory trade restrictions by the US on South Africa.
South Africa and AGOA
It is against this backdrop that Sakeliga submitted a proposal in May 2026 to the United States Trade Representative on a new way forward for the African Growth and Opportunity Act (AGOA).
AGOA has governed South Africa’s preferential access to the US market since 2000. While considerably less impactful on the broader South African economy than often assumed, AGOA access makes a meaningful difference to both local and American businesses that are able to take advantage of it, especially in agricultural and manufacturing trade.
However, South Africa’s future eligibility under AGOA is precarious.
AGOA requires a country to have established or continually be making progress toward a market economy, rule of law, lower trade barriers, poverty reduction, weeding out corruption, human rights, and worker rights. South Africa is deteriorating on all these criteria. Its government is doubling down on policies that cause massive poverty. The already extensive barriers to US investment – such as racial requirements in ownership, hiring, and mergers and acquisitions – are being expanded. Imagine insisting that US companies should limit their white male management to an arbitrary state quota, or requiring such companies to reserve 51% shareholding for black-only partners. The country’s International Trade Administration Commission (ITAC) maintains several race-restrictive licensing arrangements and has announced a target of making 85 import and export processes subject to BEE by 2029. One could go on.
It is no use pretending that South Africa would pass a serious AGOA eligibility review on merit. Already, three bills before Congress target South Africa, ranging from a mandated bilateral review to outright termination.
Moreover, AGOA is currently operational only because of a one-year extension by the US Congress, pending a thorough review of the Act before 2027.
For years, significant concern had been building within the US that AGOA was not delivering on its promise of extending US influence and serving US interests in sub-Saharan Africa. Across the board, analysts and legislators have frequently identified a key problem: AGOA’s eligibility design was binary. Either all trade from a country is eligible, or none of it is.
AGOA’s binary design drawbacks are not specific to South Africa: they apply just as much to citrus exporters in the Western Cape as to textile manufacturers in Madagascar; to local manufacturers that do not participate in BEE as much as to Ethiopian industrial parks with no involvement in the country’s northern regional conflict. Some in the US have argued that this binary constraint of AGOA is irremediable and suggested that the programme be terminated because it was too blunt, but others, such as Senators Coons and Risch with their AGOA Renewal and Improvement Bill of 2024, as well as scholars such as Prof. Marc Busch of Georgetown and policy analysts such as Daniel Runde of the Center for Strategic and International Studies, have instead advocated for revisions that could deliver greater flexibility and granularity.
With South Africa arguably not just out of AGOA soon anyway, but under consideration for punitive measures, Congress’s AGOA review presents an important opportunity to advance constructive alternatives.
A dynamic alternative
In April, the US Trade Representative (USTR) requested submissions on how AGOA could be modernised. The submissions will partly inform USTR’s recommendations to Congress in the coming months.
Sakeliga’s submission proposed that AGOA be revised to include subnational eligibility tests: looking into a country – to its US-friendly businesses and regions – and not just at the policies of a country’s national government.
Subnational eligibility tests would allow the US to maintain AGOA’s benefits for eligible businesses and goods produced in eligible jurisdictions, even when a country itself loses AGOA access due to the conduct of its national government.
In the case of South Africa, subnational eligibility at the business level could be extended to individual businesses that minimise their participation in BEE and compliance with the state’s racial hiring quotas. At the jurisdictional level, subnational eligibility could extend to provinces or municipalities that comply, within their means, with the first phase of US demands (e.g. on BEE, no expropriation without compensation, condemning the Kill-the-Boer chant, prioritising rural crime, and staying out of US-hostile foreign policy matters), which the national government refuses to do.
Notably, both measures on South Africa would be race-neutral, in stark contrast to the South African government’s approach. Any entity could qualify regardless of its owners’ race or ethnicity, and any jurisdiction regardless of its demographics. The tests are commitment and compliance – not racial composition.
While likely unsettling for South Africa’s national government from a narrow self-interested view, a renewed AGOA that works for the sections of the country who want to engage in value-based, non-race-restrictive trade and business practices – with its positive spill-over effects – is far preferable to an AGOA that is not accessible to anyone at all.
Importantly, by moving beyond the previous binary choice of keeping a country either completely in or completely out of AGOA, subnational eligibility tests offer a more dynamic way forward for AGOA across sub-Saharan Africa. By maintaining, if necessary, beneficial trade relations below the country level where it serves US interests, a modernised AGOA would generate healthy competitive pressure among governance units and business networks often much more finely attuned to the diverse realities in Africa than lethargic national governments overseeing countries demarcated by sometimes impractical colonial borders.
This may sound administratively cumbersome, but administering subnational trade access is far easier and already more common than one might think. US Customs and Border Protection already screens goods based on entity-specific determinations under Section 232, checks for labour compliance measures regarding China and Nicaragua, and differentiates between selected pharmaceutical companies. Moreover, existing fresh-produce traceability makes it elementary to connect a shipment of fruit to the farm where it was produced. Adding subnational tests to AGOA, with the aid of local certification bodies operating at no cost to the US, would be a useful and practical extension of existing US trade infrastructure.
Sakeliga’s submission aims to give South African – and all sub-Saharan African – businesses and jurisdictions a reason and a route to resist harmful domestic policies, while showing the United States an attractive, workable mechanism of targeted reciprocity, stronger enforceability, and self-funded verification.
Our full submission can be read on the USTR public docket under reference USTR-2026-0166, or on Sakeliga’s website.
Piet le Roux is CEO of Sakeliga
Russell Lamberti is a director and Chief Economist at Sakeliga
