Trade, Industry & competition minister Parks Tau has welcomed the US House of Representatives’ vote to extend the African Growth and Opportunity Act (Agoa), describing it as “necessary relief” for businesses navigating months of tariff uncertainty and strained trade relations with Washington.
But even as South Africa strikes an optimistic tone for now, businesses, financial technology providers and cross-border trade enablers warn that ambiguity about South Africa’s eligibility and the future of the US-Africa trade framework continues to pose serious risks to regional currencies, supply chains and overall business confidence.
The House passed the Agoa extension bill on Monday with overwhelming bipartisan support — 340 votes in favour and 54 against — sending it to the US Senate before going to President Donald Trump for approval. The proposed renewal would run through to December 31 2028.
According to the department of trade, industry & competition (DTIC), the renewal complements regional integration efforts under the African Continental Free Trade Area (AfCFTA) and could anchor new value chains in certain sectors.
Yet, the bill as it is leaves the country’s continued eligibility open to interpretation and future amendment.
US trade representative Jamieson Greer has described South Africa as a “unique problem” for the US, citing unresolved tariff and regulatory barriers.
More recently, US senate foreign relations committee chair Jim Risch called South Africa an “adversary”, accusing it of showing “open hostility” toward the US by conducting joint naval exercises with Iran, Russia and China.
His remarks came despite South Africa’s reported request for Iran to withdraw its warships from the ongoing “Will for Peace 2026” drills taking place off the South African coast.
The tension reflects a broader deterioration in bilateral ties — punctuated by Washington’s decision to boycott the G20 summit hosted in Joburg last year and ongoing political rhetoric that has further strained the relationship between Pretoria and Washington.
The challenge lies in what happens in the Senate, said Garth le Pere, political analyst and associate at the Mapungubwe Institute for Strategic Reflection. “Even if all 47 Democratic-caucusing senators back the bill, they would still need at least four Republican votes to reach the 51-vote [majority required for passage].”
While South Africa has “tried hard” to repair the relationship, one stumbling block, Le Pere noted, is that Ebrahim Rasool, the former ambassador to the US who was expelled about 10 months ago, is yet to be replaced.
“We really need a steady hand in Washington to grease the wheels. This is how Washington works. You have to grease the wheels of diplomacy. You have to knock on doors. And we haven’t had any presence diplomatically in Washington to do that.”
For businesses operating on thin margins, particularly in the SME segment, the outlook remains deeply uncertain, with little clarity on what the coming months will bring.
Cross-border payments provider Verto welcomed the House vote but said that ongoing political uncertainty continues to damage business confidence and trade settlement conditions, especially when eligibility remains unresolved.
“The House vote is a necessary milestone, but for the thousands of African SMEs that rely on these trade corridors, ‘almost’ is not enough,” said James Booth, head of revenue at Verto, which services more than 4,000 businesses across 170 countries.
“In our previous research on Agoa’s fragility, we highlighted that political uncertainty is a primary driver of currency volatility. When trade agreements hang in the balance, the South African rand often bears the brunt, wiping out the thin margins of exporters far faster than any headline tariff could.”
According to Booth, “the ‘post-Agoa’ mindset must be one of diversification and digital resilience” regardless of the US Senate outcome.
Business Unity South Africa (Busa) CEO Khulekani Mathe agreed that the re-authorisation of Agoa offers only limited reassurance for business, as uncertainty continues to cloud South Africa’s place in the deal.
While the bill proposes reauthorising Agoa in its current form, there are also concerns that Washington may use “other administrative mechanisms” to exclude certain countries after the fact, he said.
“At the moment, all of this is up in the air, and it’s difficult for business to make head or tail of it.”
Mathe added that even if South Africa remains a beneficiary, it’s unclear whether that would reverse the steep reciprocal tariffs.
Referring to the naval drills with countries such as Iran, he said South Africa should not be “taking pain for countries that we don’t benefit from” — noting that Iran is not even a significant trading partner. “We would expect Pretoria not to take decisions and actions that are going to fuel a situation that is already bad.”
South Africa is one of the largest exporters under Agoa, with major beneficiaries including the vehicle, citrus and mining sectors.
Originally enacted in 2000 to grant duty-free access to the US market for eligible sub-Saharan African countries, the act officially expired at end-September 2025 — though its benefits for South Africa had effectively been nullified weeks earlier, when the Trump administration imposed 30% “reciprocal” tariffs on key exports.
While the US accounts for less than 8% of South Africa’s total exports, and products qualifying under Agoa make up less than 4%, the stakes for certain industries remain high.
According to the South African Revenue Service, total bilateral trade with the US reached $15bn in 2024, with South African exports accounting for $8bn, driven largely by motor vehicles, precious metals and jewellery. Exports from January to September 2025 stood at $5.9bn, the DTIC noted in its statement.
The DTIC said Agoa-supported exports have included vehicles, ferro-alloys, citrus, jewellery, nuts, chemicals, wines, engines and ships — describing South Africa as a “crucial supplier of raw materials to many US supply chains”.
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