WANDILE SIHLOBO: Agoa extension aids SA exports despite tariff woes

We always take a keen interest in export-related matters in South African agriculture. Our sector is export-oriented and each market matters regardless of our share in it.

One of the markets that has been on top of mind for much of 2025, and as we start 2026, is the US. The first challenge was the Liberation Day tariffs, which completely changed the landscape and rendered much of our exports somewhat uncompetitive relative to the likes of Chile and Peru. We face 30% tariffs, while these competitors face around 10%.

Still, this didn’t mean we would move away from the US but rather required a sharp focus on how we could see these tariffs lowered. Another aspect that was top of mind was the African Growth & Opportunity Act (Agoa) trade preference programme, which has been due for extension. We feared that South Africa might be excluded from it for various reasons.

But the news out of the US on February 3 brought a breather. The US authorities’ formal extension of Agoa trade preference programme through to the end of this year is a welcome development.

While the Liberation Day tariffs of 30% have distorted the benefits of Agoa to some extent, it remains crucial. In the absence of Agoa some South African export products to the US would likely have faced tariffs of up to 33%, including most favoured nation (MFN) tariffs, in addition to Liberation Day tariffs.

Here, we have added an average 3% lower-end MFN tariff, but the rates generally differ by product. Thankfully, we are not at this stage and South Africa still faces around 30% tariffs on non-exempted products under the Liberation Day tariffs.

Zooming in to South Africa’s farming sector alone, the US remains an important market, accounting for about 4% of South Africa’s total agricultural exports in 2024 (overall farm product exports were valued at $13.7bn).

The exports were also strong in the first two quarters of 2025. Even after the Liberation Day tariffs were announced some exporters took advantage of the 90-day pause on the higher tariffs and exported more volumes than usual. In fact, in the second quarter of 2025 South Africa’s agricultural exports to the US increased by 26% to $161m.

It was only in the third quarter of last year that we saw some cooling in exports. Notably, South Africa’s agricultural exports to the US decreased by 11% in the third quarter compared with the same period in 2024, at $144m. The composition of the products hasn’t changed much; it is mainly citrus, wine, fruit juices, nuts and ostrich products.

We do not yet have the final quarter of 2025 data to have a full-year view. The US’s 4% share of South African agricultural exports is not small as a few specific industries are primarily involved in these exports.

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 and spices, as well as avocados, bananas, coconuts, guavas, limes, oranges, mangoes, plantains, pineapples, various peppers and tomatoes, beef and some fertiliser.

From a South African perspective it is oranges, macadamia nuts and fruit juices that benefit from the exemption. The rest of South Africa’s agricultural products face a 30% import tariff in the US market.

With the Agoa extension now official for the year, the tariff remains at 30%. From now the key focus for South Africa should be on securing a trade agreement with the US, as the higher tariffs continue to disadvantage South Africa compared with our competitors in the US market.

• Sihlobo is chief economist at the Agricultural Business Chamber of South Africa and a senior fellow in Stellenbosch University’s department of agricultural economics.