The American African Growth and Opportunity Act (AGOA) expires at the end of the month. The loss of AGOA benefits and the American 30% import tariff on South African goods is a setback for the competitiveness of agricultural export products, such as apple juice.
By Carien Kruger, Senior Journalist at African Farming and Landbouweekblad
America has, since 2000, through AGOA unilaterally offered tariff advantages to qualifying sub-Saharan African countries – with South Africa having utilised it the best.
Fruit juice is one of the industries whose exports have grown strongly in recent years thanks to AGOA benefits. Last year $27 million (R469 million) worth of apple juice and $17 million (R295 million) worth of citrus juice were exported to America.
The chance that AGOA could still be extended is extremely slim. Because it is legislation, the American Congress must approve a renewal and President Donald Trump must sign it – all before the beginning of October.
Furthermore, Trump’s new “reciprocal” tariff of 30% on South African goods has, since it was implemented on 5 August, cancelled out most AGOA benefits. The few remaining AGOA benefits will be gone by the end of September.
“AGOA lifted the general import tariffs for qualifying products, known as the most favoured nation (MFN) tariffs. America’s MFN tariffs are, on average, low, but there are exceptions,” says Eckart Naumann, independent economist and associate of the trade law centre, TRALAC.
For lemon juice, the MFN tariff, from which AGOA-qualifying countries were exempt, is, for example, almost R1.50/litre.
Half of America’s macadamia nut imports came from South Africa last year. The MFN tariff for shelled macadamias, which didn’t apply thanks to AGOA, was 5c/kg.
Last year, South Africa also exported $33 million (R573 million) worth of products in the category “edible ice, other than ice cream” (including sorbet) to America. The MFN tariff for this is 17%. When AGOA expires, the effective tariff will likely be 47% (30% plus 17%), says Naumann.
Also read: ‘AGOA is dead, now look ahead and make other plans’
30% Tariff Major Setback
America is a very important export market for the fruit juice industry, says Rudi Richards, CEO of the South African Fruit Juice Association (SAFJA).
“The overall volumes and percentage of our total exports (to America) vary according to seasonal demand and supply, but it remains significant. In 2024, our exports to America were worth more than R1 billion and comprised 14% of our total exports. This consisted of apple concentrate (almost 50%), citrus concentrate (lime, grapefruit and lemon) and ready-to-drink juices.”
Richards says 85% of these exports to America are in the form of concentrates. American importers and distributors supply it to enterprises there that mix it and process it into ready-to-drink juices.
Thanks to AGOA there was previously a 0% tariff on these products. The 30% tariff now significantly reduces the competitiveness of South Africa’s products. The most critical issue is therefore what competitors’ import tariffs are.
“The other countries (that supply the same products), including South America, are not subject to the same reciprocal tariffs. Lemon juice from Brazil is even exempt from increased tariffs.
“Our exporters tried to ship as much as practically possible to America until 5 August.”
Naumann says this year’s latest available export figures (through July) show this clearly. South Africa surpassed Chile in that time with $24.62 million in exports, compared to that country’s $13.22 million. In that period, South Africa was the Southern Hemisphere country that exported the most apple juice to America. Argentina’s exports amounted to $8.69 million, and Brazil’s were $7.68 million.
Also read: The agricultural sector can weather the impact of a potential AGOA exit
Richards says it will take time to diversify into other export markets. “The relationships with American buyers and the resulting exports to America have been built up over many years. The same process will now be needed in new markets, and it will be more complicated because other competitors will also want to diversify.”
Richards says exporters are driving diversification themselves, but SAFJA will assist them. “It is further essential that South African authorities implement meaningful support measures. This includes trade agreements with targeted markets where there are tariff barriers.”
It’s still too early to say how long it will take. Meanwhile, it’s essential to keep the conversation going with America, he says.
The 30% tariff will affect the entire value chain. “A lower (American) demand for South Africa’s concentrates could lead to lower intake of farmers’ fruit or intake at lower prices. Given that fresh fruit exports are also subject to the 30% tariff, this is a serious dilemma for the entire value chain,” he says.
Also read: Strained SA-US relations put AGOA at risk, but business must retain compliance for future trade opportunities
Glimmer Of Hope For AGOA
“Although the general view is that AGOA will not be renewed before the end of September, it is still possible that it could happen later,” says Naumann. “Perhaps it will be in a different format and still offer a degree of benefits to African countries, even if it is no longer fully tariff-free market access as before.”
