For our wine industry, this is another setback in an increasingly difficult market to compete in. Producers and exporters have already spent much of the past two years dealing with changing tariffs, rising costs and weaker demand. The prospect of losing AGOA preferences adds further uncertainty at a time when businesses need stability.
That stability has been missing for some time. South African wine exporters previously enjoyed duty-free access under AGOA, with tariffs effectively starting at 0%. Since then, they have had to adjust to rates of 30%, followed by 10% and 12.5%, with the potential combined tariff now approaching 16% if AGOA preferences fall away. These repeated changes have already caused considerable commercial disruption. The concern is therefore not simply the additional duty of approximately three percentage points, but the cumulative effect of tariff increases and ongoing uncertainty on businesses trying to plan, price and compete in the US market.
The United States remains an important market for South African wine, despite relatively modest export volumes. Historically, it has delivered higher average value per litre for packaged wine, reflecting its importance as a premium-value market. Prior to the introduction of tariffs, the USA was South Africa’s third-largest export market for packaged wine by value. While its position has since declined to seventh place, it remains firmly within our top ten markets.
Its strategic importance extends beyond the volumes we currently export. As the world’s largest wine market by value, the USA offers significant opportunities to strengthen South Africa’s reputation, build premium brand positioning and grow higher-value packaged wine exports. Maintaining a presence and investing in the market, therefore, remain important to our longer-term export growth ambitions.
Developing a market like the US takes years. Producers invest in relationships with importers and distributors, travel to promote their wines and spend considerable time and money building consumer awareness. When tariffs change unexpectedly, all of that becomes more difficult. Importers reconsider their orders, prices have to be renegotiated, and producers must decide whether the business is still commercially viable.
The impact has been especially severe for bulk wine. In 2025, the value of bulk wine exports to the US declined by 79% to just R13 million. With margins already under pressure, additional tariffs can make these exports commercially unviable. The question now is which South African wine brands, and at what price points, will still be able to compete profitably in the US market.
Some exporters have managed to absorb part of the additional cost, often together with their US importers. Others have adjusted shipments or reconsidered their market plans. But these are short-term responses. Businesses cannot continue absorbing additional costs indefinitely.
We are also concerned about South Africa’s position relative to competing wine-producing countries, particularly European suppliers. The wine market is extremely competitive internationally. If our products become more expensive because of tariffs, importers and consumers have other options. Once shelf space or distribution relationships are lost, winning them back is not easy.
In practical terms, additional import duties make it more expensive to bring a bottle of South African wine into the US. Someone along the supply chain has to carry that cost. The importer may absorb it, the producer may be asked to lower the price, or the consumer may end up paying more. Often, the cost is shared. For South African producers already operating on tight margins, none of these options is particularly attractive. And if a wine becomes too expensive compared with similar products from competing countries, an importer or retailer may simply choose another supplier.
The issue is therefore not simply whether South African wine can continue entering the US market, but whether our producers can do so competitively and profitably.
The consequences also extend beyond businesses that export wine. Our industry supports employment and economic activity across farming, packaging, manufacturing, transport and tourism. When exporters lose business, the effects can eventually be felt throughout this value chain, including in rural communities.
The immediate priority must be to find a negotiated way forward, and the next 60 days are vital.
South Africa Wine calls on the South African government to pursue a more decisive, two-pronged approach. This means intensifying high-level diplomatic engagement with the US while also developing a credible alternative trade proposal that offers a meaningful basis for negotiation. Both are necessary if we are to protect South Africa’s long-term competitive position.
The government must bring together the necessary expertise and resources to put a substantive proposal on the table before the proposed implementation date of 1 January 2027. This engagement should include close cooperation among Southern African Customs Union partners where appropriate, as well as direct consultation with affected industries to ensure that the commercial consequences are properly understood.
Exporters need clarity about which tariffs will apply, when changes will take effect, and what options remain available to them. The longer uncertainty continues, the harder it becomes for businesses to make decisions about pricing, contracts and investment.
Beyond the immediate negotiations, South Africa should pursue a more predictable and lasting trade arrangement with the United States. We cannot achieve long-term export growth while businesses remain uncertain about the conditions under which they can trade.
South Africa Wine stands ready to work with the government and our industry partners to find a constructive solution. However, given the commercial damage already experienced, further uncertainty and incremental measures will not be enough. We need a clear strategy, decisive action and tangible progress towards an agreement that protects our exporters’ competitiveness.
For an industry already working hard to improve profitability and grow the value of its exports, that certainty matters.