What possible exclusion from Agoa would mean for SA’s agricultural sector

US senator John Kennedy has introduced a new bill to extend the African Growth and Opportunity Act (Agoa) for two years, which would explicitly exclude SA.

This matters for SA’s agricultural sector, as we all continue to seek better relations with the US.

The US remains an important market for SA, accounting for about 4% of our total agricultural exports, valued at $13.7bn (R230bn) in 2024.

Agricultural exports were also strong in the first two quarters of 2025.

After the Liberation Day tariffs were announced, some exporters took advantage of the 90-day pause on the higher tariffs and exported more volume than usual during the second quarter of 2025.

In fact, in the second quarter of 2025, SA’s agricultural exports to the US increased by 26% to $161m (R2.7bn).

It was only in the third quarter that we saw some cooling in exports.

Notably, SA’s agricultural exports to the US decreased by 11% in the third quarter of 2025, compared to the same period a year ago, at $144m (R2.4bn).

The composition of the products hasn’t changed much; it is mainly citrus, wine, fruit juices, and nuts, among other typical agricultural exports to the US.

SA’s agricultural exports to the US accounted for a 3% share of overall farm product exports in the third quarter of 2025 (slightly down from the 4% annual figure in 2014, as exports in other areas increased more).

The 3% share is not small, as few specific industries are primarily involved in these exports — mainly citrus, grapes, wine, and fruit juices.

Since the start of Agoa, SA’s share of agricultural exports to the US has remained at these levels.

From now on, a great deal hinges on whether SA succeeds in securing favourable trade terms with the US.

It is also worth highlighting that the US has decided to modify its reciprocal tariffs and exempt some food products, thus easing agricultural trade friction, which is costly to both exporting countries and US consumers.

The exempted products include coffee and tea, fruit juices, cocoa, spices, avocados, bananas, coconuts, guavas, limes, oranges, mangoes, plantains, pineapples, various peppers and tomatoes, beef, and additional fertilisers.

From a SA perspective, it appears that oranges, macadamia nuts and fruit juices will benefit from the exemption.

The rest of SA’s agricultural products currently face a 30% import tariff in the US market.

If the country were in a position where the Agoa, which offers SA and other African countries lower-duty access to the US, were not renewed, we would face slightly higher tariffs.

SA would likely face about 33% tariffs if we also account for the previous Most Favoured Nations (MFN) rates, before the Liberation Day announcement.

I have added a 3% lower-end average, but the MFN rates may differ product by product.

My point is not to be exact, but to make the case that the directional tariff level will be higher than the current 30%.

These higher tariff levels would make access to the US market more challenging for various agricultural products, as competitors such as Chile and Peru face much lower tariff rates of about 10%, making them more price-competitive with SA.

These are still early days, and we are all watching developments in the US and the proposed new bill by senator Kennedy to exclude SA from Agoa.

At the time of writing, there was no final view on this issue. Suffice to say that from an agricultural perspective, the US remains a valuable market.

From our perspective, an extension of Agoa, with continuous inclusion of SA, will be valuable for our farming industry, along with the auto and other sectors.

The Eastern Cape auto industry is highly reliant on the US market.