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By Muzi Mathema
When you think about South Africa’s connections to the world, the United States stands out as one of its most important trading partners, trailing only China. In fact, the US claims the title of South Africa’s second-largest bilateral trade partner, a relationship built over decades of mutual benefit and exchange. Let’s take a friendly stroll through the details.
Why is US–South Africa trade important?
Trade between these two nations goes far beyond numbers on a spreadsheet. It’s a dynamic relationship, helping both economies grow, supporting jobs, and encouraging innovation. For South Africa, the US is a major market for locally produced products – from glimmering precious metals to high-quality vehicles and even fresh agricultural goods. The US, on the other hand, finds value in exporting its own machinery, aircraft components, and cutting-edge technology to South African businesses and consumers.
The big picture: trade in numbers
Between 2020 and 2024, the total value of goods exchanged between South Africa and the United States reached an impressive R1.3 trillion. To put it in perspective, South Africa exported R800 billion worth of products to the US during this period—a figure that tells a story of robust economic ties.
But what exactly does South Africa send to its American partners? The answer is as rich and diverse as the country itself. The lion’s share of exports consists of precious metals: think gold, platinum, and diamonds. These treasures of the earth are in high demand, and they play a starring role in the South African export portfolio. Vehicles are another major export, showcasing not just the country’s manufacturing prowess but also the global reach of its automotive industry. And let’s not forget agricultural products, which range from citrus fruits and wines to specialty items that find their way onto dinner tables in homes across America.
Meanwhile, the United States supplies South Africa with R496 billion worth of imports over the same period. US companies send over machinery of all kinds, chemicals, and high-tech equipment designed to help South African enterprises thrive. These imports include items like medical equipment and refined petroleum products, which are essential for both the country’s hospitals and its industries.
Who gains from this trade?
If you’re wondering who walks away with the biggest smile, South Africa certainly enjoys a favorable position here. The country recorded a trade surplus of R331 billion over the period, meaning it exported more to the US than it imported. That surplus is a direct result of strong demand for South African products—from precious stones to vehicles—and preferential trade terms that make exporting easier.
Tariffs: a looming threat
Tariffs, however, sometimes cast a shadow on the vibrant economic exchange between South Africa and the United States. In recent years, the US has imposed targeted tariffs on select South African goods, particularly in response to trade disputes or to protect domestic industries.
These tariffs can increase the cost of South African exports – such as steel, aluminum, or certain agricultural products – making them less competitive in the American market.
The likely impact? South African producers may see shrinking profit margins and reduced export volumes, while consumers in both countries could face higher prices.
Yet, the broader trade relationship often helps to mitigate these disruptions, as ongoing negotiations and preferential agreements aim to keep commerce flowing smoothly.
AGOA: Opening doors for South Africa
One of the cornerstones of this successful partnership is the African Growth and Opportunity Act (AGOA). This US policy aims to boost economic development across Africa by granting duty-free access to the American market for qualifying products. For South Africa, this means that over 6 800 different product lines can enter the US without tariffs. This is a huge advantage for local businesses looking to break into the American marketplace.
For many South African entrepreneurs and manufacturers, AGOA has opened doors that might otherwise have remained closed. It’s easier to compete and succeed with preferential access, and this has led to impressive growth in sectors like manufacturing and agriculture. Not only does it help companies expand, but it also supports local jobs and strengthens communities across the country.
Main players: What’s being traded?
If you peek inside South Africa’s export basket to the US, some products stand out. The most valuable category is natural or cultured pearls, precious or semi-precious stones. In monetary terms, this segment alone accounts for R361 billion in exports, or over 45% of all South African exports to the United States. These gems and minerals are prized not just for their beauty but also for their industrial uses in electronics, aerospace, and jewelry.
Vehicles are another important export, with South Africa sending R96.4 billion worth of cars and related parts to the US. American drivers might be surprised to learn that some of the vehicles they use were manufactured in South African plants – a testament to the country’s advanced automotive sector.
Agriculture also plays a significant role, with products like fruit, wine, and specialty foods finding enthusiastic buyers in the United States. South African citrus, for instance, is renowned for its quality and flavor, adding a taste of sunshine to kitchens across North America. On the import side, the US exports a variety of goods to South Africa. Machinery tops the list, reflecting South Africa’s ongoing investment in infrastructure and industrial capacity.
Aircraft components and medical equipment follow closely, supporting vital sectors like transportation and healthcare. Chemicals and refined petroleum products round out the list, helping South African businesses stay productive and competitive.
How does duty-free access shape trade?
A significant portion of this trade is made possible because of the duty-free status. In fact, around 77% of American-made goods enter South Africa without having to pay import duties. This arrangement benefits both sides, making it more affordable for South African businesses to purchase high-quality US machinery, technology, and medical equipment.
At the same time, South African exporters can send their products to the United States at more competitive prices, helping them compete with other suppliers from around the world. These duty-free benefits are crucial in maintaining a vibrant, growing trade relationship and ensuring that consumers and companies on both sides have access to the products they need.
Trade relations: More than just numbers
It’s easy to look at trade figures and see only the economic side of things, but there’s much more to this relationship. Trade creates opportunities for cultural exchange, innovation, and collaboration. American companies often partner with South African firms to share technology, develop new products, and support local communities.
For example, partnerships in the automotive sector have brought new jobs and expertise to South Africa, while collaborations in agriculture have helped farmers reach new markets and adopt sustainable practices. In the medical field, US firms have helped provide cutting-edge equipment and training to South African healthcare professionals.
Challenges and opportunities ahead
Like any long-term relationship, South Africa-US trade faces challenges. Global economic shifts, changing demand, and political developments can all influence the flow of goods and the terms of trade. For instance, rising costs for certain commodities or disruptions in shipping routes can temporarily slow down exchanges.
Despite these challenges, there are plenty of opportunities for growth. Both countries continue to invest in technology, education, and infrastructure. This lays the groundwork for even stronger trade in the years to come. New sectors, like renewable energy and digital services, are emerging as areas where South Africa and the US can collaborate.
Looking forward
The future of trade between South Africa and the United States looks bright. With strong foundations in manufacturing, agriculture, and technology, both nations are well-positioned to expand their partnership. AGOA remains a critical tool for South African exporters, and ongoing efforts to streamline trade and improve infrastructure will make it easier for businesses to succeed.
For consumers, this means greater access to high-quality products, from American medical devices to South African wines and gemstones. For companies, it means new markets and fresh opportunities to innovate and grow. And for both countries, it means a continued commitment to building a relationship that goes beyond goods and services, supporting prosperity and progress for years to come.
So, next time you spot a South African diamond or savor a glass of local wine, remember the trade ties that make it all possible. It’s a partnership built not just on economics, but on shared values, vision, and the promise of a brighter future together.
Muzi Mathema is Group Executive of Macro Business Intelligence at the Gauteng Growth and Development Agency
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