US removes South Africa from AGOA, putting thousands of jobs at risk

The United States Trade Representative (USTR) announced on Monday that President Donald Trump had notified Congress and the governments of South Africa and Rwanda of his intention to terminate their participation in the programme from 1 January 2027.

The decision followed an annual review which found that the two countries were engaging in practices inconsistent with AGOA’s eligibility requirements. 

The USTR said it was concerned about barriers to US trade and investment, corruption and threats to American national security and foreign policy interests.

“Based on the review, President Trump found that the governments of Rwanda and South Africa are engaging in practices that are inconsistent with AGOA’s eligibility criteria,” the office said.

AGOA, introduced in 2000, provides eligible sub-Saharan African countries with duty-free access to the US market for more than 1,800 products.

South Africa has been the programme’s largest beneficiary over the past 25 years, accounting for 54% of all AGOA-related exports to the US.

The Congress of South African Trade Unions (Cosatu) expressed concern about the impact of the decision on workers and businesses, particularly in the agricultural and manufacturing industries.

Cosatu said the loss of preferential access threatened thousands of jobs, adding that factories and companies in Cape Town, Atlantis, Malmesbury and Tulbagh had already experienced job losses.

“Given South Africa’s already dangerously high 43.8% unemployment rate and weak economic growth, it is important that South Africa’s government utilise the next 60 days before this exit comes into effect, to negotiate a favourable set of solutions to avert this potential blow to the South African economy and jobs,” said Cosatu parliamentary coordinator Matthew Parks.

The federation called on the government to urgently negotiate with Washington and introduce support measures for workers, companies and affected communities.

It proposed subsidies, incentives, tax rebates and holidays, as well as assistance through the Unemployment Insurance Fund’s Temporary Employer-Employee Relief Scheme.

Cosatu also called for South Africa to accelerate efforts to diversify its export markets, particularly across Africa, Europe, Asia, Canada and Brazil.

Meanwhile, trade union Solidarity blamed President Cyril Ramaphosa and International Relations and Cooperation Minister Ronald Lamola for the decision, accusing the government of failing to repair deteriorating diplomatic relations with Washington.

Solidarity’s head of public relations, Jaco Kleynhans, said the organisation had repeatedly warned that the government’s foreign policy and public statements were putting South Africa’s AGOA membership at risk.

“Ramaphosa and Lamola’s antagonism towards Trump and the White House made it impossible for the Trump administration to keep South Africa in AGOA,” Kleynhans said.

He said ordinary workers and export-oriented industries would bear the consequences of what he described as political negligence.

Solidarity called on the government to resolve the dispute with the US and said it was engaging with members of the US Congress to limit the impact of the decision.

Ahead of the announcement, Trade, Industry and Competition Minister Parks Tau said South Africa was prepared for the possibility of losing its AGOA benefits.

Tau said the government would continue engaging with Washington to secure a trade agreement beyond the programme.

He also pointed to efforts to open alternative markets through the African Continental Free Trade Area, the Southern African Development Community, India, China, the European Union, the United Kingdom and other trading blocs.

South Africa’s removal from AGOA comes after the programme was extended until the end of 2028 in September. However, the extension did not guarantee that individual countries would retain their beneficiary status.

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