By Taibat Ummi Yakubu

US President Donald Trump has moved to withdraw South Africa and Rwanda from a major preferential trade agreement that allows eligible African countries to export thousands of products to the United States without paying import duties, in a decision set to take effect on January 1, 2027.

The proposed withdrawal would strip both countries of benefits under the African Growth and Opportunity Act (AGOA), potentially increasing the cost of their exports to the American market and creating fresh challenges for businesses that depend on trade with the US.

The United States Trade Representative, Jamieson Greer, announced the decision, saying an annual assessment had found that South Africa and Rwanda were no longer meeting certain conditions required to remain beneficiaries of the programme.

According to Greer, the Trump administration had formally notified both governments, citing concerns over trade restrictions, investment barriers, national security and foreign policy interests.

South Africa appears to face a particularly difficult situation, with Washington accusing its government of maintaining policies that restrict American businesses and undermine US interests.

In a letter addressed to South African President Cyril Ramaphosa, Trump expressed concern over Pretoria's international security policies and its diplomatic relationships and cooperation with governments considered problematic by Washington.

The US president also accused South Africa of imposing significant obstacles to American trade and investment, including restrictions on agricultural imports, regulatory challenges, inadequate investment protections and intellectual property concerns.

Greer said the administration expected African countries benefiting from the programme to take necessary steps to satisfy its eligibility requirements.

However, South Africa has pushed back against the decision, describing it as unfortunate and questioning Washington's position.

The country's Trade Minister, Parks Tau, said the US was introducing fresh concerns that had not been part of the trade discussions between both governments, which began in 2025.

Despite the setback, Tau said Pretoria would intensify efforts to expand its export markets beyond the United States to safeguard local businesses and employment.

South Africa has also sought to minimise concerns about the possible economic consequences, arguing that the majority of its exports to the American market do not depend on AGOA privileges.

Government figures indicate that approximately 89 per cent of South African exports to the US entered under the World Trade Organization's most-favoured-nation arrangements in 2025, while only about 10 per cent benefited from AGOA. This represents a significant decline from the 28 per cent recorded in 2024.

The value of South African exports under the programme also dropped from $4 billion in 2024 to approximately $1.7 billion in 2025, according to Tau.

Nevertheless, the broader economic relationship between the two countries remains substantial. Bilateral trade stood at $28.8 billion in 2025, while more than 600 American companies operate in South Africa, providing employment for approximately 134,600 people.

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Pretoria has maintained that both economies have important areas of mutual interest that could make a breakdown in trade relations costly for businesses on either side.

South Africa supplies 12 of the 50 minerals classified as critical by the United States and accounts for about 70 per cent of American isotopes used for various purposes, including cancer treatment.

Its manufacturing sector also relies on American materials and components to produce goods, including vehicles and boats, some of which are exported back to the US under AGOA arrangements.

Meanwhile, the US Ambassador to South Africa, Leo Brent Bozell III, defended Washington's decision, blaming Pretoria's policies for the country's impending removal from the programme.

In a post on X, Bozell described the development as a predictable outcome, arguing that the South African government had failed to address concerns repeatedly raised by the United States.

The decision comes against the backdrop of deteriorating relations between Washington and Pretoria.

Trump previously accused South Africa of persecuting its white minority population and introduced a programme allowing white Afrikaners to seek asylum in the United States.

He also repeated allegations of genocide against white South Africans, claims that have been widely discredited.

Rwanda, on the other hand, faces additional criticism from Washington over human rights, political pluralism, respect for the rule of law and workers' rights.

The latest announcement comes just days after the US Treasury imposed sanctions on Rwanda's defence ministry over its alleged involvement in the armed conflict in the eastern Democratic Republic of Congo.

The American government accused Rwanda's defence ministry of deploying thousands of troops to support M23 rebels operating in eastern DR Congo, allegedly providing the group with weapons, military equipment, logistical assistance and training.

Rwanda has consistently denied supporting the M23 rebels despite the mounting allegations.

The potential loss of AGOA benefits also comes at a time when Rwanda's exports to the United States are expanding. US import figures show that the country's exports rose sharply to $43.3 million in 2025, compared with $13.1 million in 2024.

With the proposed withdrawal scheduled for January 2027, both countries now face the prospect of losing preferential access to one of the world's largest consumer markets, adding another layer of uncertainty to their already strained economic and diplomatic relationships with Washington.