The expiration of the African Growth and Opportunity Act (AGOA), a key U.S. trade initiative with African nations including South Africa, is threatening the country's wine industry's access to the U.S. market, raising fears that even a promised extension may come too late.

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South Africa's wine industry is facing significant challenges after the expiry of the Africa Growth and Opportunity Act (AGOA), which had allowed tariff-free access to the U.S. market for 25 years. With the end of AGOA, South African wines are now subject to higher tariffs, reducing their competitiveness against producers from countries like Australia, New Zealand, and South America.

Industry leaders report immediate financial impacts, with producers, distributors, and importers all absorbing increased costs. In response, South African winemakers are exploring new markets, such as Canada and China, where tariffs have recently been reduced or removed. The U.S. administration has indicated support for a temporary one-year extension of AGOA, but the future remains uncertain.

South African winemakers hit by U.S. trade act expiry, tariff jump

South Africa's wine industry faces an anxious time. That's after the expiry this week of a flagship U.S. trade initiative, the Africa Growth and Opportunity Act, or AGOA. It had provided tariff-free access for thousands of goods from sub-Saharan African countries to the American market for 25 years. Winemakers like Tinashe Nyamudoka, founder of Kumusha Wines, are already feeling the impact of the Act's demise. There is going to be a knock. I've mentioned already I'm going to take an 8% knock as a producer. My distributor the same, my importer the same, and probably we'll pass on what's left, 6%, and hopefully that's not a lot on the consumer. AGOA has given South African wines a competitive edge over rivals from Australia, New Zealand and South America. Now South Africa faces Trump's 30% tariff on its exports, including wine, hurting competitiveness. Our competitors, especially in the U.S. market, are the Southern Hemisphere guys, you know, South America, Chile, Argentina, New Zealand and Australia, and those guys have had lesser tariffs than us. So our wines are becoming expensive in the market, so yeah, it's really going to be tough. South Africa exported around 5.5 million gallons of wine to the U.S. in 2024, making it one of the top destinations for local producers. With the end of AGOA's preferential terms, the industry is exploring new markets. Marina Kallo is a communications manager at Wines of South Africa. There are many opportunities in other markets. Canada, for example, definitely showing as an opportunity market due to the fact that they've removed a lot of the U.S. product off their shelving. We've also learnt of China that are now dropping their tariffs on South African imports into their country, and there have been ongoing negotiations with the likes of Japan and other countries. After a long silence on the matter, the Trump administration said this week it supports a one-year extension of AGOA. Responding to Reuters' questions, the White House said it backed a temporary extension but didn't elaborate. Offering hope for Africa, AGOA does enjoy considerable bipartisan support in Washington. Supporters argue that if it isn't extended, China will move fast to fill the gap left by America.

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South African winemakers hit by U.S. trade act expiry, tariff jump

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