South Africa, Rwanda face January 2027 exit from US trade pact

US President Donald Trump has announced plans to withdraw South Africa and Rwanda from a major trade arrangement that gives African countries duty-free access to the American market, citing trade restrictions, security concerns and disagreements over foreign policy.

The proposed move, which is expected to take effect on January 1, 2027, would end the two countries' participation in the African Growth and Opportunity Act (Agoa), a programme that allows eligible African nations to export thousands of products to the US without paying import duties.

US Trade Representative Jamieson Greer said an annual assessment had established that both countries were engaging in practices that violated the programme's eligibility conditions.

Greer confirmed that the administration had notified Congress of its intention to terminate their participation and formally communicated the decision to the two governments.

Washington accused both countries of maintaining barriers to American trade and investment, while also raising concerns about national security and regional foreign policy.

South Africa faced additional criticism over corruption, restrictions on agricultural imports, investment protections and intellectual property rights.

In a letter to President Cyril Ramaphosa, Trump argued that Pretoria's international security policies and cooperation with governments considered a concern by Washington threatened American interests.

"The Trump administration is working to ensure our African partners take the necessary steps to meet the eligibility criteria," Greer said.

South African Trade Minister Parks Tau described the decision as "unfortunate", arguing that Washington had introduced new concerns that were not part of the trade negotiations initiated in 2025.

"We will continue to accelerate the diversification of South Africa's export markets to protect jobs," Tau said.

South Africa has also played down the potential economic consequences, noting that most of its exports to the US do not rely on Agoa benefits.

Government figures indicate that about 89 per cent of South African exports entered the American market under ordinary World Trade Organization terms in 2025, while approximately 10 per cent benefited from Agoa, down from 28 per cent in 2024.

Tau said exports under the programme dropped to $1.7 billion in 2025 from $4 billion the previous year.

Despite the decline, bilateral trade between the two countries stood at $28.8 billion in 2025, with more than 600 American companies operating in South Africa and supporting about 134,600 jobs.

South Africa also supplies 12 of the 50 minerals classified as critical by the US and 70 per cent of American isotopes used, among other purposes, in cancer treatment.

Oxford Economics senior economist Jee-A van der Linde warned that losing Agoa benefits would put additional pressure on South African manufacturers, particularly those struggling to find alternative export destinations.

"This decision comes as global trade flows remained disrupted and South Africa faces growing competition from cheap Chinese imports, particularly in the automotive industry," he said.

Rwanda, meanwhile, faces separate accusations involving human rights, political pluralism, the rule of law and workers' rights.

The announcement follows US sanctions against Rwanda's defence ministry over alleged support for M23 rebels fighting in eastern Democratic Republic of Congo. Washington accused Kigali of deploying thousands of troops alongside the rebels and providing weapons, equipment, logistics and training. Rwanda has denied backing the group.

Rwanda's exports to the US rose to $43.3 million in 2025 from $13.1 million in 2024. However, Oxford Economics economist Alexander Venter said America accounted for only about two per cent of Rwanda's merchandise exports, with approximately four per cent benefiting from Agoa.