First aid, now trade: Will Trump axe South Africa AGOA trade deal?

• U.S. congressmen ask Trump to cut trade ties with SA
• Unemployment and inequality risk widening
• SA turns to allies and U.S. rivals - like China

JOHANNESBURG – First U.S. President Donald Trump cut funding to South Africa over its land reform policies, now a critical trade agreement is under threat.

One thing is clear Trump is not pleased with South Africa.

Trump cut U.S. financial assistance to South Africa this month, citing disapproval of its land reform policy and genocide case against Israel at the International Court of Justice.

Now, some Republicans want to revoke South Africa's tariff-free access to U.S. markets under the Africa Growth and Opportunities Act (AGOA), which is up for review in September.

What would this mean for South Africa and why has the U.S. administration singled out South Africa?

What is the AGOA trade deal?

The Africa Growth and Opportunities Act offers duty-free access to the U.S. market for sub-Saharan African countries.

Countries need to "make continual progress toward establishing a market-based economy, the rule of law, political pluralism and the right to due process" among other conditions, according to the Office of the U.S. Trade Representative.

The aim is to boost "economic and political reform" and improve "U.S. economic relations in the region".

Beneficiary countries should also not undermine U.S. foreign policy interests, according to the AGOA site.

The act was signed in 2000 by President Bill Clinton and allows more than 6,800 products, including minerals, chemicals, fruit and vegetables, to be imported into the U.S. market duty free.

This represents 29% of total U.S.-bound exports from the 32 African countries that are party to the act.

South Africa gets tariff-free quotas on products such as wine, citrus, soybeans, sugar cane and beef.

The act is up for review when it expires in September and countries alignment with the act's criteria will be reassessed.

Why is Trump's administration angry with South Africa?

In February, Trump cut all funding after South African President Cyril Ramaphosa signed into law a Land Expropriation Act that allows the state to seize land in specific circumstances and use it in the public interest.

Many South Africans believe Trump is being influenced by Elon Musk, the South African-born billionaire who now holds a key role in his administration, as well as the AfriForum group, which champions the white Afrikaner minority and lobbied against the land act in the United States.

The White House has also criticised South Africa's commercial, military and nuclear ties with Iran and its case at the International Court of Justice accusing Israel of genocide in Gaza.

On Feb. 11, four Republican Congressmen wrote to Trump calling for South Africa to be ruled ineligible for AGOA.

The congressmen referred to South Africa's "vendetta against the State of Israel, and its embrace of the Chinese Communist Party", as well as "unlawful or arbitrary killings, arbitrary arrest or detention, serious government corruption, trafficking in persons, and extensive gender-based violence, including femicide".

There has not been any official South African response to these charges.

In early February, U.S. Secretary of State Marco Rubio said he would not attend an upcoming G20 meeting in South Africa.

After the letter from the congressmen was made public, South Africa's Minister of Mineral and Petroleum Resources Gwede Mantashe said the country was open to nuclear project bids from traditional U.S. adversaries Russia and Iran.

How would revoking AGOA affect the South African economy?

Goods traded under AGOA make up about a quarter of South Africa's $15 billion annual trade with the United States and its exclusion would badly dent the automotive, agricultural and manufacturing sectors.

The U.S. accounts for 4% of South Africa's agricultural exports and are worth some $450 million a year, while the European Union accounts for 19% and the rest of Africa 38%.

U.S. total imports from South Africa in 2024 were worth $14.7 billion, up nearly 5% from 2023, according to the Office of the U.S. Trade Representative.

The South African Revenue Service estimates there are about 93,000 AGOA-linked South African jobs.

With an unemployment rate of 31.9% and gaping levels of inequality, analysts say South Africa will have to act fast to find economic and political safety nets if its trade relationship with the United States deteriorates further.

If the diplomatic freeze continues, political analysts say South Africa could rely more on local markets, regional trade and its BRICS allies, including Brazil, Russia, India and China.

BRICS is an intergovernmental organisation aiming to boost emerging economies and also includes Egypt, Ethiopia, Indonesia, and the United Arab Emirates.

South Africa's Foreign Ministry told Reuters on Feb. 17 that South Africa was talking to other countries, including China, to shore up support in the wake of the U.S. aid cut.

(Reporting by Kim Harrisberg; Editing by Jon Hemming)