For 25 years, one of the main pillars of US-African trade has been the African Growth and Opportunity Act (AGOA). South African exporters and US importers are paying a heavy price as a result of AGOA’s recent lapse and increasing policy uncertainty. This article examines and explores:

What is AGOA?

AGOA helped develop export sectors throughout the region and granted duty-free access to the US market for thousands of goods from qualifying sub-Saharan nations. The initiative ended in late 2025 because of changes in US trade policy and congressional delay. South African exporters and their American clients are facing pricing and logistical uncertainties because of this decision, which instantly reinstated tariffs on several items.

Why AGOA mattered to South Africa (and why its uncertainty hurts)

For 25 years, AGOA reduced or eliminated tariffs on a variety of goods, including manufactured goods, textiles and clothing, some agricultural products, and some auto parts. This made it easier for South African businesses to compete in the US market. According to studies and trade data, AGOA supported jobs in labour-intensive industries and contributed significantly to South Africa’s non-oil exports to the US.

Export margins immediately tighten when AGOA benefits are eliminated, even for a brief period of time. That margin was already narrow for some product lines (most notably clothing, shoes, and some processed agricultural products); reimposing “Most Favoured Nation (MFN)” tariffs might suddenly render exports that were previously profitable unprofitable. Additionally, economic modelling also suggests exclusion from preferential access can reduce output and welfare in exposed sectors.

How South African exporters are being impacted now

Price shock and margin squeeze. In the US, unexpected tariffs increase landed costs. Either sellers pass the duty on to US customers and risk lost orders, or they absorb the duty and lose profit. After the lapse, confirmed buyers and sellers were rushing, with some buyers temporarily bearing losses in the hopes of receiving remedies that would take effect immediately. This is a risky and unsustainable option.
Inventory and working-capital stress. Exporters who have completed goods bound for the United States now risk cancellations, return shipments, or unforeseen re-pricing.
Supply-chain disruption and shift in demand. Future order volumes for South African producers may decline if US buyers choose to use nearer-shore sources or alternative suppliers in nations that still enjoy preferential treatment.
Sectoral pain points. AGOA-enabled access has been crucial in the particularly vulnerable industries of automotive components, some processed foods, and clothing. Due to possible tariffs, South Africa’s auto exports, for instance, have been the focus of bilateral discussions and constituted a sizeable portion of AGOA-eligible flows.

How US importers are affected

Higher landed costs and pricing decisions. Costs increase when tariffs are reinstated. Importers have to choose between finding other suppliers, raising prices, or absorbing costs. This affects competitiveness and margins.
Contract risk and reputational exposure. Retailers and brands that made promises of duty-free rates or specific delivery dates may encounter legal and PR nightmares if they are unable to fulfil their obligations due to tariff shocks.
Inventory planning and stock shortages. Even though they were common in the 1990s, just-in-time inventory strategies are extremely vulnerable and risky. Importers may be forced to delay launches, reorganise assortments, or cut order quantities due to unexpected cost hikes.
Operational complexity. Importers must now invest time and compliance resources into tariff classification, bonding, duty-relief mechanisms and contingency sourcing. These are extra overheads that many were not budgeting for.

What the near future might look like

Predicting politics is hard. Several scenarios are plausible:

Short-term retroactive renewal or emergency extension. A limited retroactive extension that reinstates tariff treatment for shipments made during the lapse could be passed by Congress. Some buyers were hoping for this result. However, this would just address the short-term issue and not address the underlying uncertainty.
A negotiated, reformed AGOA (“AGOA 2.0”). Policymakers may look to relaunch a narrower, more reciprocal deal. That would give time for adjustment but likely include new rules (labour, environmental standards, reciprocity) that could change eligibility and compliance burdens.
Permanent shift to MFN + Sectoral Tariffs. If US policy moves towards broader reciprocal tariffs (and some policy signals point that way), preferential access may be diluted. That outcome would force durable reshoring or supply diversification by US buyers.

Policy risk is the one constant regardless of the course that is taken. If importers and exporters don’t have backup plans and continue treating the situation as temporary, they run the danger of experiencing significant disruptions to their business operations.

Practical safeguards exporters and importers can implement now

The concrete, practical steps listed below include some legal, business, and/or operational ones. In an unclear AGOA climate, this could lessen the negative effects.

For South African exporters

Revisit pricing and contracts now. Include tariff contingencies in contracts that are being signed or renewed. Include clear provisions for modifications to duty or tariff status and decide how expenses will be distributed in the event that preferences change.
Prioritise origin documentation and compliance. To protect any lingering preference claims and to enable duty drawback or refunds if regulations change, keep meticulous records of origin and origin-based compliance. Proper documentation increases the likelihood of retroactive relief and expedites customs procedures.
Leverage INCOTERMS® strategically. INCOTERMS define where risk, cost, and responsibility shift between buyer and seller. South African exporters can use terms like FCA (Free Carrier) or FOB (Free-On-Board) to transfer responsibility at the point of shipment, limiting exposure to unexpected tariffs, freight surcharges or destination-side duties. For higher control and better margin recovery, exporters may opt for CIF (Cost, Insurance and Freight) or DAP (Delivered-at-Place) to manage freight costs directly and build them transparently into their pricing models. Turners Shipping have dedicated INCOTERM specialists who can aid exporters in structuring their contracts appropriately. We also boast the Turners Training Academy, who deliver structured training to corporates.
Diversify export markets and product mix. Increase market expansion for intra-African markets, the EU, the UK, and regional value chains (e.g. SADC). In order to transition to higher-value, less tariff-sensitive products, look for product upgrades.
Explore tariff mitigation and supply redesign. To be eligible for further preferential programs, consider value-added shifting, input sourcing modifications, or tariff engineering (moving the location of production or assembly).
Cashflow and inventory stress-testing. Determine which SKUs and customers are most at risk by running scenario models (tariffs at various rates, buyer concessions); take immediate action to lessen exposure.
Engage Trade Bodies and Government. Through chambers or trade associations, collective diplomacy might advocate for short-term relief, compensatory measures, or bilateral talks.

For US importers

Review contractual liabilities. Verify who is responsible for tariff risk under current buy and sales agreements. To appropriately distribute risk for upcoming shipments, negotiate addenda.
Use INCOTERMS® to balance tariff and logistics risk. Adjusting delivery terms can provide immediate relief from uncertainty. For example, shifting from DDP (Delivered-Duty-Paid) to DAP (Delivered-at-Place) or CIF transfers responsibility for customs clearance and duty payment back to the buyer, giving importers greater flexibility to manage tariff exposure. Conversely, buyers wanting supply-chain control may negotiate FOB or FCA terms, locking in predictable freight and customs-handling processes. Correctly applied, INCOTERMS can significantly reduce unexpected financial hits from AGOA-related duty shifts.
Hedge procurement and pricing. Use dynamic pricing clauses or renegotiate rates with retail consumers if possible. Increase the transparency of retail prices where appropriate.
Find alternate sources and dual-source critical SKUs. Reduce single-source vulnerability by beginning to qualify suppliers in the Americas/Asia or other AGOA-eligible nations.
Use Customs tools: bonding, duty drawback and tariff classification. To lessen upfront tariff charges, take advantage of duty drawback programs (refunds for tariffs on re-exported goods), customs bonded warehouses, and precise HS code classification.
Increase visibility and flexibility in supply chains. Reduce lead times, space out shipments, and increase safety stock for items that pose a high risk.

Commercial and policy actions that both sides should push for

Transparent, time-bound contingency plans. Governments and trade bodies should publish likely timelines and options for retroactive relief to help businesses plan.
Sectoral support packages. While long-term policy solutions are being negotiated, targeted aid, input subsidies, or temporary tax relief can mitigate employment losses in industries where jobs are at risk, such as textiles and car components.
Dialogue and advocacy. In order to create a viable AGOA replacement that strikes a balance between regulations and market access, South African industry associations and US buyers should jointly provide proof of damage and specific recommendations.

Uncertainty is a cost. The time to act is yesterday.

AGOA and other trade preferences are powerful but ultimately political instruments, and indeed, recent geopolitics have proven they can be fickle. The predictability they offer for long-term investment decisions is just as valuable as tariff lines. The recent lapse has demonstrated the speed at which that predictability can evaporate.

For South African exporters, the immediate imperative is to protect profitability and cash flow. Unfortunately, as a South African, for American importers, it’s to secure supply and maintain competitiveness. For both, the smartest single move is to treat this not as a temporary blip but as a structural shock. It is time to tighten contracts, diversify suppliers and markets, and invest in compliance and scenario planning.

Partner with a logistics team that plans beyond uncertainty

The future of AGOA may be unclear, but your supply chain doesn’t have to be. At Turners Shipping, we specialise in helping South African exporters and American importers stay competitive even when trade agreements shift and times are uncertain.

From Tariff and INCOTERM strategy to route optimisation, customs compliance, and proactive scenario planning, our team ensures your cargo keeps moving and your margins stay protected.

Let Turners Shipping help safeguard your trade advantage today.

Speak to our Trade Specialists and National Commercial Manager, Paul Thomas, to schedule a consultation on mitigating AGOA-related risks.

Gregory Marks
Business Development & Transformation Manager
Turners Shipping

AGOA in limbo: what the uncertainty means for South African Exporters and their American buyers