US Plans to Remove South Africa and Rwanda From AGOA in 2027, Putting $1.7 Billion in South African Preferential Exports at Risk

The United States has notified Congress of President Donald Trump's intention to remove South Africa and Rwanda from the African Growth and Opportunity Act (AGOA) effective 1 January 2027, threatening preferential market access for two African economies whose trade relationships with Washington differ substantially in size and structure. South Africa, the programme's largest beneficiary, exported approximately $1.7 billion in goods under AGOA in 2025, while Rwanda's total goods exports to the United States amounted to $43.3 million. The proposed exclusions follow Washington's annual eligibility review and arrive as Congress faces a separate decision over whether to renew AGOA itself, which is currently authorised only until 31 December 2026. United States Trade Representative Jamieson Greer announced the decision on 2 November, saying the administration had determined that both governments were engaging in practices inconsistent with AGOA eligibility requirements. Washington cited barriers to American trade and investment and concerns involving national security and foreign policy in both countries. It additionally identified corruption in South Africa and concerns about the rule of law, political pluralism, internationally recognised workers' rights and human rights in Rwanda. The announcement did not identify specific transactions or regulatory measures underlying each finding, leaving the two governments and affected businesses to assess how the decision might be reversed before its proposed effective date. The immediate economic exposure is considerably larger in South Africa, where agricultural exporters, manufacturers and associated logistics businesses have developed commercial relationships around preferential access to the American market. Rwanda's bilateral goods trade is much smaller, and its apparel exports have been excluded from AGOA preferences since 2018. The political implications nevertheless extend beyond the direct value of preferential exports because the latest decision connects access to the American market with Washington's wider assessments of governance, investment conditions and foreign policy alignment. South Africa's AGOA Exports Have Already Fallen From $4 Billion to $1.7 Billion South Africa's Department of Trade, Industry and Competition reported that approximately $1.7 billion of the country's exports to the United States entered under AGOA in 2025, compared with $4 billion in 2024. That represents a decline of roughly 57.5 percent in the value of preferential exports over one year, before the proposed removal takes effect. The government's figures also show that AGOA exports accounted for approximately 10 percent of South African exports to the United States in 2025, down from 28 percent a year earlier, while around 89 percent of exports entered under ordinary World Trade Organization most favoured nation terms. Those numbers establish an important distinction between the total bilateral trade relationship and the portion directly dependent on AGOA. South African exports to the United States would not automatically stop if the programme's benefits were withdrawn. Most already enter outside the preferential arrangement, and exporters could continue selling goods to American customers under the tariffs and rules applicable to their products. The commercial risk is concentrated in sectors where the loss of tariff preferences would increase landed costs enough to reduce margins, weaken competitiveness or make existing supply contracts less attractive. The effects would vary considerably by product. Citrus exporters, wine producers and manufacturers supplying the American market may face different tariff rates, production costs and alternatives for redirecting goods. Agricultural exports are particularly sensitive to established buyer relationships, packaging specifications, seasonal shipping arrangements and distribution networks, while manufacturers may have invested in equipment and production systems designed around American customers. Even a relatively modest tariff increase can affect profitability where exporters operate on narrow margins and compete with suppliers from countries enjoying more favourable trade treatment. The loss of AGOA preferences would also arrive after other American trade measures had already reduced the programme's commercial value. An August 2026 Congressional Research Service assessment noted that South African motor vehicles were subject to a separate 25 percent tariff under Section 232, while additional tariffs had been imposed on South Africa and certain other countries under Section 301. AGOA preferences do not automatically override these separate tariff measures, meaning some exporters have already been operating under a more restrictive trade environment despite their country's eligibility for the programme. That distinction helps explain why the value of South African AGOA exports has fallen substantially without implying that every dollar of the decline resulted from a single policy decision. Changes in commodity prices, export volumes, product classifications, American demand and applicable tariffs can all affect the reported value of preferential trade. South Africa's wider relationship with the United States remains economically substantial. Pretoria reported bilateral trade of $28.8 billion in 2025 and said more than 600 American companies operate in the country, supporting approximately 134,600 jobs. South Africa also supplies strategic mineral and industrial products to the American market, while some South African exporters purchase components and equipment from American manufacturers. The withdrawal of AGOA preferences would therefore affect particular commercial supply chains within a much larger relationship rather than terminate bilateral trade. The South African government has disputed Washington's handling of the negotiations. Trade Minister Parks Tau said Pretoria had offered additional concessions beyond those agreed in 2015, while maintaining that the proposals respected South Africa's constitutional obligations, biosecurity requirements and World Trade Organization commitments. The government also argued that Washington had introduced new concerns that had not formed part of the discussions initiated in 2025. Pretoria says it will continue engaging American authorities while supporting affected exporters and expanding market access elsewhere. Its diversification strategy identifies opportunities across the African Continental Free Trade Area, the European Union, the United Kingdom, India, China, Southeast Asia and Latin America. Redirecting existing exports, however, requires more than identifying new markets. Producers must establish commercial relationships, satisfy technical and regulatory requirements and compete against suppliers already serving those destinations. Rwanda Faces a Smaller Trade Shock but a Wider Diplomatic Problem Rwanda's exposure is different because its trade relationship with the United States is much smaller. The Office of the United States Trade Representative reports that American goods imports from Rwanda reached $43.3 million in 2025, an increase of 43.3 percent from the previous year, while American goods exports to Rwanda amounted to $39.1 million. Total bilateral goods trade was therefore $82.4 million, compared with $251 million in services trade. The figures require careful interpretation. The $43.3 million represents total American merchandise imports from Rwanda, not the value of goods that actually received AGOA preferences. It would be inaccurate to present the entire amount as exports that will lose duty free status. Certain goods may already face zero ordinary tariffs, while others may enter under different customs arrangements. AGOA also applies to eligible merchandise rather than services, meaning the proposed removal does not directly withdraw the preferences governing Rwanda's considerably larger bilateral services relationship. Rwanda has also faced restrictions under the programme before. In July 2018, the first Trump administration suspended Rwanda's AGOA apparel benefits following a dispute over tariffs and restrictions on imported secondhand clothing and footwear. Washington argued that Rwanda's measures restricted American trade, while Rwanda had been pursuing domestic textile and apparel development within a wider East African effort to reduce dependence on imported used clothing. The suspension affected apparel exports rather than removing Rwanda from the programme entirely, allowing other eligible products to continue receiving preferential treatment. The 2026 announcement is therefore broader. It seeks to terminate Rwanda's country eligibility rather than suspend preferential treatment for one category of products. It also includes diplomatic and governance concerns beyond those that drove the earlier disagreement over secondhand clothing. The timing is particularly consequential because the AGOA announcement followed additional American sanctions related to the conflict in the eastern Democratic Republic of Congo. On 28 October, the US Treasury Department sanctioned Rwanda's Ministry of Defence and Zigama Credit and Savings Society, accusing them of facilitating support for the M23 armed group and its political wing. Treasury alleged that Rwandan forces were operating alongside M23 in eastern DRC and supplying military assistance, while Rwanda has repeatedly denied supporting the group and disputed accusations concerning its involvement in the conflict. The AGOA statement did not explicitly establish the October sanctions as the legal basis for Rwanda's proposed exclusion. Its references to national security and foreign policy concerns nevertheless place the trade decision within a period of deteriorating diplomatic relations between Washington and Kigali over eastern DRC. This creates a different commercial and diplomatic calculation from South Africa's. Rwanda faces less immediate merchandise trade exposure in absolute dollar terms, but losing its remaining AGOA eligibility would further narrow a bilateral trade relationship already affected by the earlier apparel suspension. It would also demonstrate that American trade preferences can be withdrawn alongside other foreign policy measures even where the directly affected trade flows are relatively small. AGOA Itself Expires on 31 December 2026 The timing of the proposed exclusions introduces a further uncertainty because AGOA is not presently authorised beyond the end of 2026. Congress originally established the programme in 2000 to provide eligible countries in sub Saharan Africa with preferential access to the American market. It was designed to encourage export diversification, private investment, industrial development and closer commercial relations between the United States and African economies. Eligibility is reviewed annually and includes conditions covering market access, governance, political rights and economic policy. The programme expired on 30 September 2025 before Congress approved a temporary extension in February 2026, restoring benefits retrospectively and authorising AGOA through 31 December 2026. Unlike the previous ten year renewal approved in 2015, the latest extension provided only a short period of certainty for exporters and investors. The proposed removal of Rwanda and South Africa would become effective on 1 January 2027, the same day the current statutory authorisation would no longer be in force unless Congress renews the programme. That means the practical consequences depend partly on what happens to AGOA itself. If Congress allows the programme to expire, the absence of benefits would affect all participating countries, not just Rwanda and South Africa. If lawmakers renew it while the two countries remain excluded, the targeted suspensions would produce a clearer distinction between their treatment and that of other eligible African exporters. The uncertainty is already relevant to investment decisions. Companies building factories for export markets generally require several years to recover capital expenditure, develop supplier relationships and establish reliable production. A trade preference that may expire within months cannot provide the same investment certainty as one guaranteed for a longer period. The United States has also indicated that it wants to reconsider the programme's design. Greer said in February that Washington intended to work with Congress on modernising AGOA in accordance with the administration's trade policy priorities, including greater market access for American businesses and agricultural exporters. Congressional debates have consequently moved beyond a straightforward extension toward questions about reciprocity, eligibility requirements, supply chain security and the commercial benefits received by the United States. African exporters therefore face two overlapping uncertainties: whether their individual countries will continue qualifying and whether the programme will retain its present form after December. Africa's Preferential Trade With the United States Is Becoming More Concentrated AGOA has delivered measurable benefits to selected African industries, but its use has remained concentrated among a relatively small number of countries and products. According to the Congressional Research Service, American imports receiving AGOA duty free treatment totalled approximately $5 billion in 2025, down from $7.9 billion in 2024. The largest beneficiaries by import value were South Africa, DRC, Nigeria, Kenya and Madagascar. The principal product categories included refined copper, apparel, passenger vehicles, crude oil and ferroalloys. These figures show that the programme serves different economic functions across the continent. In some countries it supports industrial employment through garments and manufactured goods, while in others it facilitates exports of minerals, petroleum or agricultural products. The presence of DRC among the largest beneficiaries is particularly relevant to East and Central Africa. Congressional data place its AGOA eligible exports to the United States at approximately $1.4 billion in 2025, dominated by mineral trade. Kenya recorded about $361.6 million, with apparel remaining an important component of its export relationship. The figures also expose the limitations of treating AGOA eligibility as equivalent to industrial competitiveness. Preferential tariffs can make African goods more attractive in the American market, but they do not automatically resolve electricity costs, transport delays, financing constraints, labour productivity, material quality or limited manufacturing capacity. Some African economies have remained eligible for years without developing export industries large enough to use the programme extensively. For countries that have succeeded in attracting factories around AGOA, however, changes in eligibility carry substantial consequences because investment decisions are partly based on continued access to the American market. Apparel businesses in particular may make production and sourcing decisions based on relatively small tariff differences because margins are narrow and global buyers can shift orders between competing countries. South Africa's proposed exclusion could therefore create opportunities for manufacturers elsewhere in Africa, but any redistribution of orders would depend on production capacity, product compatibility, investment conditions and whether the programme itself is renewed. Existing factories cannot simply transfer complex supply chains to another country within a few months. Trade Preferences Are Becoming Part of a Wider Foreign Policy Negotiation The latest decision also demonstrates the extent to which AGOA eligibility is tied to Washington's broader policy objectives. The original legislation included political and economic eligibility conditions, so the use of annual reviews to address governance and market access is not new. What has changed is the immediate policy environment, in which American trade decisions are increasingly connected to national security, foreign policy and demands for reciprocal market access. In South Africa's case, relations with Washington have been strained by disagreements over domestic policies, international diplomatic positions and trade restrictions. The Trump administration has criticised South African land and racial policies, while Pretoria has rejected claims that it systematically persecutes white citizens and maintains that its policies operate within the country's constitutional framework. The two governments have also differed over international political questions, including South Africa's case against Israel at the International Court of Justice. In Rwanda's case, the deterioration in relations is closely associated with eastern DRC, where Washington has accused Kigali of supporting M23 and has moved from diplomatic pressure to sanctions affecting Rwandan state institutions. Kigali disputes those accusations and maintains that its security concerns and the obligations of other parties must be addressed. The USTR announcement places both countries under the same proposed trade measure despite the differences between their disputes with Washington. That illustrates the breadth of the eligibility criteria, which permit the administration to consider commercial and political issues when determining whether a country should retain preferences. For African governments, the commercial implication is that preferential access to the American market remains conditional on a continuing assessment by Washington. Industrial investors may price that uncertainty into their decisions, particularly in sectors where future exports depend heavily on preferential tariffs. The policy also creates a challenge for the United States. AGOA has historically been presented as an instrument for strengthening commercial relationships and encouraging African production. Removing beneficiaries may advance particular diplomatic objectives, but it can also disrupt American importers, companies operating in African markets and supply chains developed around the programme. The balance between those objectives will depend on how Washington applies the eligibility conditions and whether the programme is renewed. January 2027 Will Test Both AGOA Eligibility and the Programme's Future South Africa and Rwanda have until the proposed effective date to continue diplomatic engagement with Washington, although the USTR announcement does not guarantee that negotiations will produce a reversal. South Africa has already indicated that it intends to pursue a settlement while preparing support measures for affected businesses, and the American administration says it wants partners to satisfy the programme's eligibility criteria. For South African exporters, the immediate concern is the cost of serving American customers after preferential treatment ends, especially in industries where alternative buyers and markets cannot be developed quickly. For Rwanda, the direct merchandise trade exposure is substantially smaller, but the prospective loss of its remaining benefits adds another economic dimension to a difficult diplomatic relationship. The future of AGOA itself will determine how far the consequences extend. A renewed programme that excludes South Africa and Rwanda would preserve preferences for other beneficiaries while removing the two countries. An expiry without renewal would expose all eligible exporters to a much wider change in American trade treatment. The distinction will matter for investment decisions across East, Central and Southern Africa. The programme has supported selected manufacturing and commodity exports, but the combination of short renewal periods, separate American tariffs and annual political eligibility reviews makes long term export planning increasingly difficult. South Africa's decline from $4 billion to $1.7 billion in AGOA exports over one year already shows how rapidly the recorded value of preferential trade can change. Rwanda's experience since 2018 shows that eligibility can be withdrawn selectively and remain restricted for years. The new announcement brings both cases together as Congress approaches another decision on the future of America's principal preferential trade arrangement with sub Saharan Africa. FAQ Has the United States already removed South Africa and Rwanda from AGOA? No. The Trump administration announced its intention on 2 November 2026, with the proposed exclusion taking effect on 1 January 2027. Why does the United States want to remove the two countries?Washington says both countries have failed to satisfy AGOA eligibility conditions, citing trade and investment barriers and national security concerns. It also identified corruption concerns in South Africa and governance, rights and political pluralism issues in Rwanda. How much does South Africa export under AGOA? According to South Africa's government, the country exported approximately $1.7 billion under AGOA in 2025, compared with $4 billion in 2024. How much does Rwanda export to the United States? US government figures record $43.3 million in goods imports from Rwanda in 2025. This includes all merchandise imports, not exclusively products receiving AGOA preferences. Was Rwanda previously suspended from AGOA? Rwanda's apparel benefits were suspended in July 2018 following a dispute over restrictions on imported secondhand clothing and footwear. The country remained eligible for other benefits. Does removing AGOA eligibility ban exports to the United States? No. Exporters may continue selling to American buyers, but affected products would lose preferential treatment and become subject to the applicable tariff rules. When does AGOA expire? Its current legislative authorisation expires on 31 December 2026 unless Congress approves another extension. Which other African countries depend on AGOA? The largest beneficiaries in 2025 included South Africa, DRC, Nigeria, Kenya and Madagascar, covering products such as refined copper, clothing, vehicles, oil and ferroalloys.