US Cuts South Africa and Rwanda From Duty-Free Trade Deal From 1 January

Photo: Reuters/Siphiwe Sibeko via CNBC Africa

The United States will cut South Africa and Rwanda out of its duty-free trade deal from 1 January 2027. The move hits cars, farm goods and wine that have entered America without tariffs for years, and it lands after months of souring ties between Washington and Pretoria.

Al Jazeera reported that US Trade Representative Jamieson Greer announced the decision on Monday. President Donald Trump, he said, had found that both governments were engaging in practices that do not fit the eligibility rules of the African Growth and Opportunity Act, known as AGOA.

AGOA has run since 2000. It lets eligible African countries sell more than 1,800 products into the United States without paying duty. South Africa has been its biggest user. Reuters reported that South Africa exported about $1.7 billion worth of goods to America under AGOA in 2025, out of about $5 billion in total imports under the programme.

Washington gave different reasons for each country. For Rwanda, it pointed to barriers to trade and investment, the rule of law and human rights. Rwanda was cut from part of the deal once before, in 2018, after it raised tariffs on used clothing imports. For South Africa, Washington cited barriers to US trade and investment, corruption, and threats to US national security and foreign policy interests.

South Africa's government said last week it was ready for a bad result from the review and still open to talks. President Cyril Ramaphosa has said in recent weeks that his country must prepare for life outside the programme and is already looking for new markets, including China. Moneyweb, citing Bloomberg, reported that Trade Minister Parks Tau told reporters on Friday that America would remain a valued partner, and that South Africa has 60 days to argue against the removal.

What changes, in plain terms, is the price at the border, not access itself. South African goods can still be sold in America, but they will now face normal US tariffs instead of entering duty-free. That matters most for the goods that used the deal: cars and car parts, plus farm products such as citrus fruit and wine. Rwanda's main exports under the deal are coffee, tea and minerals, a far smaller trade, with goods imported from Rwanda totalling $43.3 million in 2025.

The key figures:

• 1 January 2027, when the suspension takes effect
• About $1.7 billion in South African exports under AGOA in 2025
• About 1 percent of South Africa's total global exports came through AGOA in 2025
• About 10 percent of South Africa's exports to the US came through AGOA
• Close to 10,000 jobs at risk overall, on various estimates, with about 3,000 in farming and manufacturing

The wider picture is a trade relationship already under strain. America is South Africa's second largest export destination after China, with bilateral trade of about $29 billion in 2025 against about $36 billion with China. Pretoria has been trying to agree a broader trade deal with Washington since Trump set harsh tariffs that hit its car sector, in a country with one of the highest jobless rates in the world. The same week has shown how fast old alliances are shifting elsewhere, from China's fresh diplomacy push in the Middle East to the strain on Sudan's power grid and the draft deal taking shape in the Iran talks.

Sources

• Al Jazeera, US to suspend South Africa and Rwanda from duty-free trade access
• CNBC Africa (Reuters), What does the loss of US trade benefits mean for South Africa and Rwanda?
• Moneyweb (Bloomberg), South Africa, Rwanda lose access to Agoa

What happens next is South Africa's case against removal in the 60 day window, and whether exporters can shift sales to other markets before January.

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