The US Senate has approved a two-year extension of the Africa Growth and Opportunity Act (AGOA). AGOA is a US trade program that allows eligible African countries to export certain products to the United States without paying import tariffs. This program was introduced in 2000 with the aim of stimulating trade and investment between the US and African nations.
The extension became possible after several months of uncertainty regarding the program's future. AGOA was set to expire in September 2025 and had previously been temporarily extended until the end of 2026. The Senate voted for the extension by a margin of 90 to six, incorporating the AGOA provision into a larger government funding bill.
However, for the legislation to take effect, it must be approved by the US House of Representatives before being sent to President Donald Trump for signature.
According to data from the South African Revenue Service (SARS), trade between South Africa and the United States amounted to approximately $15 billion in 2024. South Africa exported goods worth about $8 billion to the US, while imports from the US totaled around $7 billion, giving South Africa a trade surplus of approximately $1 billion (R242.5 billion).
The extension comes amid strained relations between South Africa and the US. Both countries disagree on South Africa's foreign policy, including its relations with Russia, China, and Iran. Furthermore, South Africa's referral of Israel's actions in Gaza to the International Court of Justice has further heightened tensions with Washington.
Trump has repeatedly stated that white South Africans, particularly farmers, are victims of genocide. Earlier this year, Trump said: 'What is happening in South Africa is terrible. It is a terrible situation. What they are doing to people, a certain group of people, is incredible. You wouldn't think this could happen today.' He added: 'Well, we have seen the numbers, we have seen the records, and it is happening, and it must be stopped.'
The South African government and private groups are making efforts to refute Trump's statements, which echo the claims of local interest groups.
South Africa's export sector is adapting to the new 12.5% US tariff system following significant changes in Washington's legislation and trade policy, with key agricultural exemptions providing vital market support.
It is particularly important for the domestic sector that fresh oranges remain exempt from these duties, maintaining duty-free access to the American market and ensuring significant stability for both producers and importers. However, other citrus categories, including mandarins, grapefruit, and lemons, are still subject to tariffs, and a proposed Section 301 investigation is considering a 12.5% rate for a number of trading partners.
Minister of Trade, Industry and Competition Parks Tau explained that the US Trade Representative's (USTR) decision followed extensive written submissions, diplomatic consultations in Washington, and testimony presented at public hearings. It is important for the agricultural sector that the USTR confirmed key product exemptions under Annex I and Annex II, maintaining duty-free access for fresh oranges, as well as orange and lime juice and macadamia nuts.
To explain the main reason for the USTR's determination, Tau announced that South Africa will publish a notice in the Government Gazette inviting the public to comment on draft provisions banning the import of goods produced using forced or child labor. Tau stated: 'The government will continue to engage with the USTR regarding Section 301 tariffs with the aim of either eliminating or reducing the current tariff levied on our country.'
Commenting on the change in the base rate, Vandile Sichlobo, Chief Economist at Agbiz, noted that while the increase to 12.5% is not ideal, the sector remains in a manageable position compared to previous proposals. Sichlobo added: 'The agricultural sector could still achieve more, given where we started: a 30% tariff. It is worth noting that the US has increased tariffs for several countries, including some of South Africa's agricultural competitors, such as Australia, Peru, and Chile, which are also at these levels. Notably, oranges, fruit juices, and nuts remain exempt from these tariffs.'
From an operational standpoint, the trade landscape arrives at a time when the citrus industry was already experiencing a difficult period after severe winter flooding in key growing regions, which exacerbated price pressure across the entire value chain. Despite these operational hurdles, the Citrus Growers Association of South Africa (CGA) welcomed the retention of the exemption for oranges, while highlighting ongoing price pressure on soft citrus varieties.
Paul Hardman, CGA's Operations Director, stated that while orange producers have provided vital reassurance, non-exempt categories face additional duties. He noted: 'It is important that oranges remain tariff-free and continue to enjoy duty-free access to the US market. This has brought relief to our producers and the US consumer market. But all other citrus categories, including mandarins, grapefruit, and lemons, are currently subject to the new 12.5% tariff.'
He also noted that although the 2.5% increase over the previous base rate will put pressure on local producers, it does not change the relative market dynamics compared to key regional rivals. 'New tariffs are also being introduced on our main South American competitors—so this should not fundamentally alter the competitiveness of South African citrus in the US.'
However, Hardman argued that the logic of duty-free access for oranges should naturally extend to the entire range of citrus. He explained: 'The logic of tax exemption applied to oranges should apply to other citrus categories, such as mandarins, whose exports from South Africa to the US have more than tripled over the last decade.' He added that 'South African citrus is off-season and complements US production. Restricting access risks preventable price increases for US consumers, while our trade already supports thousands of American jobs in logistics and retail.'
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