A contentious law that allows South Africa\u2019s government to expropriate land \u2013 without compensation in some cases \u2013 has enraged the United States, triggering aid cuts by Washington and outbursts from President Donald Trump. <\/p>\n
Many fear that the African nation could now potentially lose some of its US trade privileges as relations between the two countries deteriorate. <\/p>\n
South Africa is the largest beneficiary of the African Growth and Opportunities Act (AGOA), a US trade agreement that provides preferential duty-free access to US markets for eligible Sub-Saharan African nations. <\/p>\n
Some US lawmakers want those benefits withdrawn when AGOA is reviewed this year. <\/p>\n
In January, South Africa enacted the Expropriation Act, seeking to undo the legacy of apartheid, which created huge disparities in land ownership among its majority Black and minority White population. <\/p>\n
Under apartheid, non-White South Africans were forcibly dispossessed from their lands for the benefit of Whites. Today, some three decades after racial segregation officially ended in the country, Black South Africans, who comprise over 80% of the population of 63 million, own only around 4% of private land. <\/p>\n
The expropriation law empowers South Africa\u2019s government to take land and redistribute it \u2013 with no obligation to pay compensation in some instances \u2013 if the seizure is found to be \u201cjust and equitable and in the public interest.\u201d <\/p>\n
President Cyril Ramaphosa said the legislation would \u201censure public access to land in an equitable and just manner.\u201d But the White House disagrees. <\/p>\n
Trump and his South African-born billionaire adviser Elon Musk believe that the land reform policy discriminates against White South Africans. Sanctions have since followed. <\/p>\n
Responding to a post by Ramaphosa on X about the new legislation, Musk asked: \u201cWhy do you have openly racist ownership laws?\u201d <\/p>\n
In an executive order issued on February 7, Trump revoked all aid for South Africa, accusing the country of human rights violations. He also denounced South Africa\u2019s stance against Israel\u2019s war in Gaza, saying the nation undermined US national interests. <\/p>\n
The executive order did not specify what aid was being halted but nearly $440 million was committed to South Africa in 2023 \u2013 the bulk of which went to its health sector \u2013 according to data on the US Foreign Assistance website. <\/p>\n
Ramaphosa said in a post on X before the order was issued that, \u201cwith the exception of PEPFAR Aid (the US President\u2019s Emergency Plan for AIDS Relief) which constitutes 17% of South Africa\u2019s HIVAids programme, there is no other funding that is received by South Africa from the United States.\u201d <\/p>\n
\u201cBased on the changes in trade policy and national interests of the US government, the possibility of changes and South Africa\u2019s exclusion does exist,\u201d he said. <\/p>\n
To remain eligible for AGOA, a benefiting nation <\/strong>\u201cmust demonstrate respect for rule of law, human rights \u2026 (and) should also not seek to undermine US foreign policy interests,\u201d according to requirements outlined on its website. <\/p>\n In a letter to Trump on February 11, US Rep. Andy Ogles and three other Republican congressmen called for South Africa\u2019s duty-free access to the US market to be withdrawn and for diplomatic ties to be suspended, expressing disapproval of its land reforms, its alleged \u201cvendetta against Israel\u201d and its \u201cembrace of China.\u201d <\/p>\n South Africa\u2019s exports are partly driven by agriculture, which accounted for 10% of the country\u2019s total export earnings in 2021, according to the National Agricultural Marketing Council (NAMC). South Africa is the main agricultural exporter under AGOA and its largest beneficiary, according to the US Department of Agriculture. <\/p>\n In a 2023 report, the department said that two-thirds of South Africa\u2019s agricultural exports to the US \u201care exported tariff-free under AGOA,\u201d with exporters of citrus, wine and fruit juice among the top beneficiaries. <\/p>\n \u201cSouth Africa is likely to face higher tariffs of about 3% for agricultural exports to the USA should the country be ineligible for AGOA benefits,\u201d he said. <\/p>\n \u201cThe loss of preferential market access for the agricultural sector could lead to reduced foreign exchange earnings, decreased competitiveness of South African agricultural products in the USA, and potential job losses,\u201d Thindisa added. <\/p>\n The move might also run counter to the Trump administration\u2019s apparent aims. Stripping South Africa of its AGOA privileges on account of its expropriation law would hurt the same White farmers whom the US seeks to protect, according to Chrispin Phiri, a spokesperson for the country\u2019s foreign minister. <\/p>\n He added that: \u201cIt\u2019s a known fact that most of our commercial farmers are White. They are the ones who are in the majority in the commercial agricultural sector, and they have a commercial gain from an agreement like AGOA. So, the very same people that you believe are being persecuted would be persecuted by such a volatile decision.\u201d <\/p>\n \u201cIt would affect us considerably and threaten local jobs,\u201d he said. \u201cIt is difficult to estimate precisely to what extent. Citrus is the economic heart of Citrusdal, and any shocks or changes in the industry affect the entire rural community.\u201d <\/p>\n Justin Chadwick, who heads South Africa\u2019s Citrus Growers Association (CGA), said the group was concerned about the situation. <\/p>\n \u201cIf AGOA is not renewed, it will create a challenging environment for South African citrus.\u202fAGOA\u202fensures our citrus isn\u2019t subject to US tariffs. A US tariff on South African citrus would make our fruit more expensive for American consumers.\u201d <\/p>\n \u201cTo give\u202fyou\u202fan idea of how many jobs\u202fare\u202fcurrently connected to\u202fUS\u202fcitrus\u202fexport: an estimated 35,000 local jobs from farm level throughout\u202fthe\u202fsupply chain as well as an additional 20,000 jobs in\u202fthe\u202fUS\u202fare sustained by\u202fUS-SA\u202fcitrus\u202fexports. Without\u202fAGOA,\u202fthese jobs will surely be under threat.\u201d <\/p>\n At least 100,000 pallets of citrus are shipped to the US from South Africa annually, he said, adding that \u201cSouth Africa\u2019s entire North American exports make up around 9% of our total citrus exports.\u201d <\/p>\n Outside the Americas region, which accounted for 6% of South Africa\u2019s agricultural exports in 2024, the African continent is the main market for the country\u2019s agricultural goods, making up 42% of its agricultural exports, according to the Agricultural Business Chamber of South Africa (Agbiz). <\/p>\n Other export destinations include Asia and the Middle East, which together totaled 21%, and the European Union, which made up 19% of South Africa\u2019s agricultural exports for 2024, Agbiz data showed. <\/p>\n Despite the comparatively lower trade volume, the US market \u201cmatters significantly,\u201d according to Wandile Sihlobo, chief economist at Agbiz. <\/p>\n \u201cFirstly, the exports (to the US) are concentrated in specific industries, mainly nuts, citrus, wines, grapes, and fruit juices. This means while the risks associated with this market are not as significant in proportion to overall agricultural exports, they present challenges to specific industries,\u201d he said. <\/p>\n Secondly, Sihlobo said, \u201cthe negative sentiment arising from any confrontation with the Americas region would have negative effects on South Africa\u2019s agriculture. For the citrus grower Van der Merwe, finding an alternative destination for his produce if South Africa is removed from AGOA and exporting to the US becomes less profitable would not be easy. <\/p>\n \u201cWe would still probably export quantities (of) citrus to the US, but given that the usual tariffs would then apply, it would be a big setback,\u201d he said. \u201cSouth African citrus is valued in other markets like the Middle East and the EU, and switching to those markets if it is more profitable can be considered. But the volume of exports for us to the US is large, it will be difficult for it to be absorbed elsewhere.\u201d <\/p>\n South African leader Ramaphosa said on Thursday he was ready to \u201cdo a deal\u201d with the US to repair their plummeting relations. <\/p>\n \u201cWe would like to go to the United States to do a deal,\u201d he said while responding to questions from Richard Gnodde, vice chairman of US bank Goldman Sachs, during a conference in Johannesburg. <\/p>\n \u201cWe don\u2019t want to go and explain ourselves,\u201d he added. \u201cWe want to go and do a meaningful deal with the United States on a whole range of issues.\u201d <\/p>\n Ramaphosa did not specify what the deal would entail but noted it would span trade, diplomatic and political issues. <\/p>\n \u201cWe decided that it\u2019s not best to have a knee-jerk reaction,\u201d Ramaphosa said of Trump\u2019s executive order cutting aid to his nation. \u201cWe wanted to let the dust settle.\u201d <\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" A contentious law that allows South Africa\u2019s government to expropriate land \u2013 without compensation in some cases \u2013 has enraged the United States, triggering aid cuts by Washington and outbursts from President Donald Trump. Many…<\/p>\n","protected":false},"author":1,"featured_media":4584,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[118],"tags":[],"class_list":["post-4583","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world"],"_links":{"self":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/posts\/4583","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/comments?post=4583"}],"version-history":[{"count":0,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/posts\/4583\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/media\/4584"}],"wp:attachment":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/media?parent=4583"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/categories?post=4583"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/tags?post=4583"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} What happens if South Africa is cut off from AGOA?<\/h2>\n
Are there other markets to turn to?<\/h2>\n
It is, therefore, vital that South Africa maintains positive agricultural relations with this region.\u201d <\/p>\n Can South Africa mend its ties with the US?<\/h2>\n