South Africa’s Agricultural Sector at Risk as Trade Tensions Escalate
South Africa’s agricultural industry faces a critical juncture as trade relations with the United States deteriorate. The country, which has long relied on preferential access to US markets through the African Growth and Opportunities Act (AGOA), is now under threat of losing these benefits due to its controversial land expropriation law. This potential shift could have far-reaching consequences for both the nation’s economy and its White farming community.
The Expropriation Act and Its Implications
The Expropriation Act, passed in January 2025, aims to address historical land inequalities rooted in apartheid-era policies. Under this legislation, the South African government can seize land without compensation if it deems the action “just and equitable and in the public interest.” While the law is framed as a step toward equity, it has sparked fierce opposition from the US, where critics argue it discriminates against White South Africans.
President Donald Trump and his South African-born adviser Elon Musk have been vocal opponents of the law, accusing the South African government of implementing “racist ownership laws.” In response, Trump issued an executive order revoking aid to South Africa, citing human rights violations and the country’s stance on Israel’s war in Gaza.
Impact on Trade Relations
The AGOA has been a cornerstone of South Africa’s economic strategy, granting duty-free access to US markets for eligible Sub-Saharan African nations. As the largest beneficiary of the agreement, South Africa accounts for a significant portion of the region’s exports. According to data from the US Department of Agriculture, two-thirds of South Africa’s agricultural exports to the US are tariff-free under AGOA.
Economists warn that if South Africa loses its AGOA status, it could face substantial financial losses. Victor Thindisa, a senior manager for Markets and Economic Research at the National Agricultural Marketing Council, highlighted the potential consequences: “South Africa is likely to face higher tariffs of about 3% for agricultural exports to the USA should the country be ineligible for AGOA benefits.”
Effects on the Agricultural Sector
White farmers, who dominate the commercial agricultural sector, stand to lose the most if AGOA is revoked. Gerrit van der Merwe, a citrus grower from Citrusdal, expressed concerns about the impact on local jobs. “It would affect us considerably and threaten local jobs,” he said. “Citrus is the economic heart of Citrusdal, and any shocks or changes in the industry affect the entire rural community.”
Justin Chadwick, head of the Citrus Growers Association, echoed these sentiments, noting that thousands of jobs are tied to US citrus exports. “Without AGOA, these jobs will surely be under threat,” he said. The association estimates that around 35,000 local jobs and an additional 20,000 US jobs are supported by South African citrus exports.
Alternative Markets and Challenges
While South Africa’s agricultural exports are primarily directed to the US, the country also relies on other markets such as the European Union, Asia, and the Middle East. However, the US market remains crucial for specific industries like citrus, wine, and fruit juice. Wandile Sihlobo, chief economist at Agbiz, emphasized the importance of maintaining positive trade relations with the Americas. “The negative sentiment arising from any confrontation with the Americas region would have negative effects on South Africa’s agriculture,” he said.
For citrus growers like van der Merwe, finding alternative markets may not be straightforward. “Switching to those markets if it is more profitable can be considered,” he said. “But the volume of exports for us to the US is large, it will be difficult for it to be absorbed elsewhere.”
Efforts to Mend Relations
Despite the tensions, South African President Cyril Ramaphosa has expressed willingness to engage with the US to repair their strained relationship. “We would like to go to the United States to do a deal,” he said during a conference in Johannesburg. “We don’t want to go and explain ourselves. We want to go and do a meaningful deal with the United States on a whole range of issues.”
Ramaphosa emphasized the need for a measured approach, stating, “We wanted to let the dust settle” following Trump’s executive order cutting aid to his nation.
