In this edition of Business Law Focus, host Evan Pickworth interviews Avishkar Harriparsad, partner at PKF Durban, about a new era of tariff turbulence, what businesses can expect and how to navigate the choppy waters.
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Avishkar Harriparsad on tariff turbulence: Why SA and Africa must brace for new era of trade risk
The winds of global trade are shifting, and SA finds itself directly in their path. At the centre of the debate is the African Growth and Opportunity Act (Agoa) — the landmark US trade preference programme that has granted duty-free access to thousands of African goods entering US markets since 2000.
As Agoa officially expired at the end of September, uncertainty looms with renewal prospects complicated despite the proposal of a framework deal by the SA government. The loss — or even significant revision — of this arrangement would have far-reaching implications for the SA economy. Export support has been made available in the form of a desk to mitigate the impact of tariffs, but this is not a long-term solution.
SA delegations have already begun visiting Washington to negotiate extensions and exemptions, aware that a lapse, or significant revision, could expose billions in exports to steep tariffs.
If duty-free access is curtailed, sectors such as steel, aluminium and automotive components would be hardest hit, as they depend heavily on global markets. Tariffs under US law, justified on “national security” grounds, have already been imposed on similar goods elsewhere. The ripple effects for SA manufacturers could be significant.
Meanwhile, industries like precious metals may escape direct impact thanks to robust global demand. Similarly, copper producers are currently buffered by strong international prices. Automotive exporters such as Volkswagen SA, whose main markets lie in the EU, demonstrate the importance of diversified markets and tailored trade strategies.
Complicating matters further is the shifting legal landscape in the US itself. Tariff measures under Section 301 (targeting unfair trade practices), Section 202 (safeguards), and even executive orders invoking national security are being tested in US courts. In many cases, proceedings are being fast-tracked, raising fresh questions about the constitutional and legal foundations of US tariff policy.
For SA, this legal uncertainty has two implications. First, it challenges the long-term predictability of US trade measures — rules can change overnight. Second, it complicates any strategy of reciprocal tariffs, as legal rationales may be overturned or reshaped at short notice. African policymakers and exporters need to stay agile, ensuring compliance today while preparing for a more contested trade environment tomorrow.
Why Agoa matters
For SA, Agoa has underpinned access to one of the world’s most lucrative consumer markets. Sectors such as automotive, agriculture, steel, and aluminium have all benefited from duty-free or preferential access. The US is SA’s second-biggest trading partner after China.
Duty-free access has not only boosted exports, it has also strengthened investor confidence by providing predictable access to global markets. For local producers, particularly in the automotive industry, Agoa has helped position SA as a global production hub, supporting thousands of jobs.
Cost of losing duty-free access
Should SA lose Agoa eligibility, exporters would face most-favoured nation (MFN) tariffs under standard World Trade Organisation rules. For many industries, that could mean duties of 10%–25% or more, eroding competitiveness almost overnight. For instance, African Farming reports that half of America’s macadamia nut imports came from SA last year. The MFN tariff for shelled macadamias, which didn’t apply thanks to Agoa, was 5c/kg. Last year, SA also exported $33m (R573m) worth of products in the category “edible ice, other than ice cream” (including sorbet) to the US. The MFN tariff for this is 17%. When Agoa expires, the effective tariff is likely to be 47% (30% plus 17%).
The South African Fruit Juice Association (Safja) says that in 2024 exports of the product to the US were worth more than R1bn and comprised 14% of total exports. This consisted of apple concentrate (almost 50%), citrus concentrate (lime, grapefruit and lemon) and ready-to-drink juices.
Thanks to Agoa, there was previously a 0% tariff on these products. The 30% tariff now significantly reduces the competitiveness of SA’s products. Other at-risk sectors include:
- Automotive exports, one of SA’s crown jewels, would become more expensive in the US, potentially diverting investment to other Agoa-eligible countries. According to Tralac, vehicle exports to the US had already dropped by 82% in early 2025 due to new tariffs.
- Agriculture, particularly citrus and wine, would face steep duties that could price products out of US markets. Reports have stated that citrus, wine and macadamia nuts face steep tariffs, threatening more than 30,000 jobs and shaving 0.4% off GDP growth.
- Steel and aluminium, already under pressure from global oversupply and US “national security” tariffs, could see further barriers.
- Apparel and equipment: These industries, which benefited from duty-free access, now face tariffs up to 30%, reducing competitiveness.
The ripple effects would extend beyond exporters. Supply chains, employment and communities dependent on trade would all be affected.
Geopolitical undercurrents
Agoa’s uncertainty is not occurring in isolation. Globally, trade policy is increasingly shaped by national security considerations, industrial strategy and domestic politics. The US has deployed tariffs under Section 301, Section 202 and executive orders, often fast-tracked through courts and difficult to predict.
SA’s political positioning on global issues — from its stance on international conflicts to its engagement with Brics partners — may also influence Washington’s decision-making. Trade policy is rarely just about economics; it is about relationships and values.
Moment for strategy
If Agoa’s renewal is uncertain, what should SA do? Three imperatives stand out:
- Diversify markets and pivot to alternate trade partners: The EU (already at a reported 41% of SA’s foreign direct investment, Africa (via the AfCFTA) and Asia represent significant growth opportunities. Relying too heavily on US access creates vulnerability. China has offered duty-free access to African nations, while opportunities with Brics can also be explored.
- Invest in competitiveness: Reducing logistics bottlenecks, improving energy reliability, and enhancing skills will help SA exports compete globally, even without preferential access.
- Strengthen regional value chains: By leveraging continental trade agreements and regional production hubs, SA can reduce reliance on any single external partner.
Navigating the next chapter
The loss of Agoa duty-free status would be a setback, but it need not be a crisis — if SA prepares. The reality is that trade winds are shifting everywhere. The era of stable, predictable rules is giving way to a world of geopolitical bargaining, climate-linked trade measures and digital trade disputes.
SA’s task is to remain agile: to negotiate hard in Washington, to deepen continental integration at home and to build a diversified export base that can withstand external shocks. Agoa has been a gift. Its possible loss should be a wake-up call.
For SA and its African peers, the message is clear: tariffs are no longer abstract policy — they are a frontline business risk. Agoa’s future, US legal challenges to tariffs and domestic reforms all point to a trade environment that is becoming more volatile, fragmented and politicised.
The winners will be those who combine market diversification, real-time data, agile supply chains and strong compliance systems. The losers will be those who assume yesterday’s trade rules will hold tomorrow.
The countdown has begun. For SA business, the imperative is to prepare — not just to survive tariff turbulence, but to position strategically for the opportunities it will create.
