Ange Tuck

Monday Myths with AfSA Today we publish our edition of Monday Myths on a Sunday because of the topic’s time sensitivity. There is a strong possibility that South Africa will be removed from the US list of AGOA beneficiaries tomorrow afternoon (2 November). ❎ Myth: Losing AGOA would wreck South Africa’s economy. ✅ Fact: The overall effect would probably be very small. ❎ Myth: So it doesn’t matter. ✅ Fact: Car manufacturers, fruit and nut farmers, and the communities that depend on them could be hit hard. -------------------------------------- A CLOSER LOOK How does AGOA work? The African Growth and Opportunity Act (AGOA), introduced in 2000, allows certain African products into America without normal import taxes, called tariffs. AGOA runs until December 2028, but the US reviews each country's eligibility annually. South Africa could lose its benefits for 2027, with a decision expected tomorrow (2 November). Losing AGOA wouldn’t stop South Africa from trading with America. Some of our exports would just cost more to sell there. And America has to give 60 days’ warning first, so if it announces the decision by 2 November, the change would start on 1 January 2027. What are the current tariffs? Since July 2026, most South African goods have faced an extra 12,5% tariff. America claims South Africa isn't doing enough to stop imports made using forced labour, although some products are exempt. Cars and car parts face separate tariffs of around 25%, while steel and aluminium face tariffs of up to 50%. AGOA removes normal tariffs, not these extra charges. Without it, ordinary Most Favoured Nation (MFN) tariffs, averaging 3,5%, would return. Some products could therefore face an extra 3,5% in tariffs on top of the 12,5% they already pay, bringing the total to about 16%. What will the effect be on SA's economy as a whole? Probably surprisingly little. Trade economist Donald MacKay argues that AGOA's benefits are exaggerated. The average saving is only 3,5%, while major exports such as gold and platinum don't depend on AGOA. Professor Raymond Parsons of North-West University agrees that the overall economic impact should be manageable. But individual businesses could lose sales and jobs, while uncertainty could discourage future investment. Can other markets save us? There is encouraging evidence. Daryl Swanepoel pointed out in Business Day that agricultural exports grew from $13,7 billion in 2024 to $15,1 billion in 2025. Growth in other markets more than compensated for declining American sales. But some citrus, wine, macadamia and litchi producers depend heavily on American buyers. Finding new customers takes time, and they may pay less. In the Western Cape, for example, struggling wine exporters could cut jobs on farms and in packaging, processing and transport. Families, shops and entire towns could suffer. Which industries are most vulnerable? Motor vehicles: Losing AGOA could raise tariffs on some cars from 25% to 27,5%. The existing 25% tariff has already helped reduce exports to America by around 80%, threatening factory jobs. Citrus: Some oranges enter duty-free, but mandarins and tangerines already face 12,5%. Losing AGOA could add 1,5-2,5 US cents per kilogram. America buys only 5-6% of our citrus exports, but some growers depend heavily on it. Grapes, raisins, apples, pears and wine: Additional product-specific duties could make exports less competitive against countries such as Chile and Peru. Western Cape jobs are particularly vulnerable. Macadamias, fruit juices and other fruit: Some products enjoy exemptions, but ordinary duties could return. America is an important macadamia buyer and received nearly 29% of our litchi exports in 2025/26. Steel, aluminium and precious metals: AGOA offers little protection against existing metal tariffs. Many precious metals remain duty-free anyway. The bottom line Losing AGOA wouldn't destroy our economy, but it could cost jobs and hurt entire communities. We need to support vulnerable exporters, improve our ports, maintain talks with America and find new markets. A small national loss can mean enormous local pain. Sources: brookings.edu, businessday.co.za, businesstech.co.za, dailymaverick.co.za, eNCA on Youtube, netwerk24.com, news24.com, nwu.ac.za, wandilesihlobo.com, zonos.com