By Lulu White
The narrative that South Africa is dependent on the African Growth and Opportunity Act (AGOA) for economic prosperity is deeply flawed.
While AGOA provides some trade benefits, the reality is that South Africa gains far less from AGOA than the United States does. Moreover, the era of U.S. economic dominance in Africa is waning, as the continent pivots towards intra-African trade and BRICS partnerships.
If the U.S. were to remove AGOA privileges or impose sanctions, South Africa would suffer minimal economic impact, while the U.S. would struggle with disruptions in supply chains for critical minerals and industrial components. This article unpacks the trade relationship, highlighting how South Africa is strategically positioned to weather any U.S. economic retaliation.
The trade imbalance: Who benefits?
South Africa’s exports to the U.S.
In 2023, South Africa exported $8.32 billion worth of goods to the U.S., including:
• Precious Metals & Stones (PGMs, Gold, Diamonds): $2.95 billion
• Vehicles: $1.22 billion
• Aluminum & Iron: $1 billion
• Agricultural Products (Citrus, Nuts, Wine): $226 million
• Machinery & Chemicals: $731 million
(Trading Economics, 2024)
These exports are essential for U.S. manufacturing, automotive, and tech industries, making South Africa a strategic supplier rather than a dependent beneficiary.
U.S. exports to South Africa
The U.S. exported $9.3 billion in goods and services to South Africa, mostly in:
• Machinery & Transport Equipment (22.7%)
• Agricultural Products (Poultry, Wheat, Corn) – $263 million
• Chemicals & Pharmaceuticals – $1.5 billion
(U.S. International Trade Administration, 2024)
While U.S. exports to South Africa are significant, they are not irreplaceable—South Africa can easily source these goods from BRICS partners or local production.
AGOA: A one-sided deal?
AGOA allows duty-free access for certain African exports to the U.S. South Africa exported $3 billion worth of goods under AGOA in 2022, which only represents a fraction of its total trade.
However, the real beneficiaries of AGOA are U.S. businesses that gain cheap access to South African raw materials. The auto industry, for instance, relies on duty-free South African exports, and U.S. mining firms benefit from access to platinum, iron, and steel without high tariffs.
If AGOA were revoked, the biggest impact would be on automobile exports, but alternative markets in Europe, Asia, and Africa could offset this loss.
The weakening power of U.S. sanctions
In previous decades, U.S. sanctions could cripple economies. However, the global landscape has changed. Today, countries like Russia, China, and Iran continue to trade despite U.S. sanctions.
U.S. sanctions no longer intimidate Africa because of:
• The rise of Intra-African Trade;
• The African Continental Free Trade Agreement (AfCFTA) is reducing dependency on the West;
• African countries are trading more with each other, minimizing reliance on U.S. imports;
• The BRICS factor;
• China is now Africa’s largest trading partner, providing an alternative market;
• Russia and India are increasing commodity purchases from South Africa, ensuring continued demand;
• De-dollarization is accelerating;
• BRICS nations are pushing for trade in local currencies to bypass the U.S. dollar; and
• South Africa can shift critical exports (platinum, metals, agriculture) to alternative markets, reducing U.S. leverage.
The reality is that South Africa no longer fears economic punishment from Washington because the U.S. is not its only option.
What happens if South Africa retaliates with increased trade tariffs?
If South Africa were to impose tariffs on U.S. imports, or even restrict mineral exports, the impact on U.S. industries would be substantial:
• Automakers like Ford and GM would face higher costs due to disruptions in platinum supply, which is essential for catalytic converters;
• Aerospace and tech industries would struggle with sourcing critical raw materials, affecting production costs; and
• Agriculture exports from the U.S. to South Africa (especially poultry and wheat) would decline, hurting American farmers.
On the other hand, South Africa could replace U.S. imports with Chinese, European, or African alternatives—a manageable adjustment compared to the chaos it could cause for U.S. manufacturers.
South Africa is no longer a U.S. pawn
The days of Africa relying on Western economic favours are over. South Africa is in a strong position, with growing trade links in Africa, BRICS, and global markets:
• AGOA is not critical to South Africa’s economy—the U.S. benefits more than it admits;
• Sanctions are less impactful in a world where global trade is shifting; and
• South Africa can retaliate by imposing tariffs or redirecting trade to BRICS, causing more harm to the U.S. than itself.
If the U.S. removes South Africa from AGOA or attempts economic retaliation, the country's response will not be one of desperation but strategic realignment—and Washington knows it.
References
• Trading Economics. (2024). South Africa’s exports to the U.S. https://tradingeconomics.com/south-africa/exports/united-states
• U.S. International Trade Administration. (2024). South Africa’s trade with the U.S. https://www.trade.gov/country-commercial-guides/south-africa-agricultural-sector
• AfCFTA Secretariat. (2023). Impact of intra-African trade agreements. https://au.int/en/treaties/afcfta
• BRICS Economic Forum. (2024). De-dollarization and global trade realignment. https://brics.org/economic-initiatives
* Dr. Lulu White is the CEO of the Elections Management Consulting Agency of Africa.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.