For years, the African Growth and Opportunity Act (AGOA) has given South African businesses—big and small—preferential access to the U.S. market. That means certain exports, from citrus to car parts, can enter the U.S. duty-free. But with the Trump administration reviewing South Africa’s inclusion, that advantage may soon disappear.
Now, let’s be real. The review isn’t exactly shocking. South Africa’s government has made political decisions that don’t align with U.S. interests, and AGOA was always a conditional agreement, not a right. It’s fair to ask: why should a country that regularly badmouths the U.S. still enjoy trade privileges? But that’s a debate for politicians. What really matters here is the fallout for small businesses.
The Hidden Cost of Losing AGOA
We often hear about AGOA in terms of the big players—the automotive sector, large agribusinesses, and metals exports. But small businesses are in this too. If you supply products that end up in exports to the U.S., even indirectly, you could be hit. The impact isn’t always obvious until it happens.
For example, take the citrus industry. South Africa exports a lot of oranges, lemons, and grapefruits to the U.S. under AGOA. The citrus industry employs around 140,000 people, many working for smaller farms and processing businesses. If tariffs come back (potentially as high as 30%), U.S. buyers may turn to cheaper options from Mexico or Peru. That could mean job cuts, lost contracts, and some businesses shutting down.
The same goes for jewelry, textiles, and automotive parts—industries where small suppliers feed into bigger export chains. The South African auto industry supports over 86,000 direct jobs and 125,000 related jobs. But here’s the thing: South Africa isn’t a competitive auto producer anymore. India and China can build cheaper and faster. If AGOA goes, so does one of the last remaining reasons for U.S. buyers to choose South African-made components.
No Safety Net for Small Business
The worst part? South Africa’s economy is already struggling. The last real economic growth happened in the 1990s. High unemployment, a weak rand, and rising costs have made survival difficult for small businesses. Removing AGOA benefits just adds another obstacle.
Unlike big corporations, small businesses don’t have the luxury of lobbying government officials or moving operations to other markets overnight. A few might find new buyers in Europe or Asia, but that takes time, money, and connections—resources many small businesses simply don’t have.
What Can Small Business Owners Do?
If you’re a small business owner, now is the time to take stock of your risks:
• Know your exposure – If you sell to an exporter, find out if their U.S. sales depend on AGOA. If they take a hit, so will you.
• Diversify if possible – Look at alternative markets, whether local or international. The EU and parts of Africa may offer opportunities, though competition is tough.
• Prepare for higher costs – If AGOA goes, tariffs will make exports to the U.S. pricier. That could mean lost customers or squeezed margins.
Lessons from the Past
I recently spoke to a British manufacturer who saw his business collapse in the late 1990s. Why? Because he didn’t anticipate how China’s rise in global trade would wipe out small-scale Western manufacturers. Within four years, he was out of business.
The same thing could happen here. If South African small businesses don’t pay attention, they could get caught in the crosswinds of global trade shifts. Some already see it coming and are making adjustments. Others will only realize when the orders stop coming in.
South Africa’s government will likely try to negotiate some kind of bilateral deal, but Trump isn’t known for giving freebies. The reality is, AGOA has been a lifeline for many, and its potential loss is another harsh blow in an already tough business environment.
Small business owners need to stay alert. Because when these changes hit, they don’t send a warning letter first.
