[Letter] Agoa uncertainty harms wine sector

The tariffs introduced by the Trump administration are governed by a clear hierarchy rather than applying cumulatively. For products such as wine, which are not subject to national security-based duties under Section 232 of the US Trade Expansion Act, the binding constraint is the reciprocal tariff regime introduced in 2025. This places South African wine exports under a 30% ad valorem tariff, regardless of their eligibility under the African Growth & Opportunity Act (Agoa).

Agoa nonetheless still has a role to play. Its recent reauthorisation removes most favoured nation (MFN) tariffs, but it does not exempt eligible products from reciprocal tariffs imposed on trade-balance grounds. South African wine thus faces a single elevated tariff that replaces the former preferential baseline.

The short-term relief matters, given the size of the wine industry and the number of jobs at stake. However, Agoa’s value is constrained by persistent uncertainty, since the US president retains executive authority to remove South Africa’s eligibility.

Further uncertainty arises from the agreement’s unilateral nature and fixed expiration dates. The present extension expires on December 31 with no clarity on what follows. Dependence on periodic congressional renewal and shifting party politics exposes exporters to recurring policy risk.

Unlike some competing wine exporters, South Africa lacks a bilateral trade agreement or country-specific arrangement with the US that could mitigate the impact of reciprocal tariffs. In the absence of such a framework, exporters remain exposed to discretionary US trade policy shifts, regardless of Agoa’s temporary extension.

Just as South Africa has struck a bilateral framework with China granting preferential access, Agoa’s renewal amid ongoing trade talks should be used as a launchpad for a bilateral trade deal that protects goods that have benefited from Agoa since 2000.

Letter originally appeared here.