AGOA was designed to offer buyers predictability – but its advantages are actually threatened by the turmoil of shifting US commerce guidelines.
Like a lot of the world, Africa is perplexed by the rollercoaster journey of shifting United States (US) commerce coverage. That’s significantly true of the adjustments to AGOA – the African Progress and Alternative Act, in place since 2000. The association provides 32 African nations duty-free entry to the profitable US marketplace for most exports, while not having to reciprocate.
In April 2025, US President Donald Trump slapped massive ‘reciprocal’ tariffs on most nations worldwide below the Worldwide Emergency Financial Powers Act (IEEPA). These tariffs worn out most of AGOA’s benefits, and the settlement lapsed on 30 September, with Trump displaying no inclination to resume it.
The IEEPA tariffs and uncertainty about AGOA’s renewal have badly dented African exports to the US. In line with the Commerce Regulation Centre (TRALAC), AGOA exports dropped 32% within the yr ending November 2025 in comparison with 2024.
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South African auto exports, which had been a serious AGOA beneficiary, plunged virtually 75% in 2025 from 25 544 autos to six 530. South African automakers managed to seek out sufficient different patrons to spice up total 2025 exports by virtually 6% to a document 414 268 items.
Then, towards the percentages, the US Congress this yr handed laws – as a part of a wider funds invoice – to increase AGOA till 31 December 2026, retroactively from 30 September 2025. Trump signed the regulation into impact on 3 February.
However that appeared too little, too late. As Donald MacKay, Director at XA World Commerce Advisors, famous, resuscitating AGOA was largely meaningless as its advantages had been overridden by different measures. These included the IEEPA tariffs in addition to tariffs on sure merchandise akin to vehicles, metal and aluminium below part 232 of the Commerce Growth Act.
Then, barely two weeks after AGOA was prolonged, the US Supreme Courtroom rescinded Trump’s reciprocal tariffs on 20 February, saying he had exceeded his authority below IEEPA. Trump reacted by imposing a ten% tariff improve on all nations below part 122 of the 1974 Commerce Act. This got here into impact on 24 February and can expire on 24 July. Trump has threatened to extend it to fifteen%.
As Eckart Naumann, unbiased economist and affiliate at TRALAC notes, Trump seems to be searching for other ways to completely exchange the IEEPA tariffs the courtroom struck down. Naumann additionally says the brand new developments have elevated uncertainty.
That’s definitely true. As Naumann notes, AGOA’s renewal restores the desire margin for beneficiary nations, though the brand new part 122 surcharges nonetheless apply to them. Which means the variety of duty-free tariff traces is far smaller than it was a yr in the past (earlier than the IEEPA tariffs).
Naumann says that, in line with 2025 commerce knowledge, 80% of AGOA nations’ baseline exports to the US would now be exempt from part 122 surcharges. For South Africa, the tariff is diminished from 30% to 10% (for items not already topic to part 232 tariffs or exempt from part 122 tariffs, akin to sure minerals, chemical substances and foodstuffs). This must be a substantial benefit when coupled with AGOA’s restoration.
Naumann notes although, that regardless of its baseline tariff discount, South Africa nonetheless faces a disproportionate burden in comparison with different AGOA beneficiaries, due to the tariffs on autos (25%) and metal and aluminium (50%).
And the way lengthy South Africa would possibly profit from the AGOA revival is not at all clear. The US’ annual resolution on which sub-Saharan nations are eligible for AGOA (normally issued in December) is imminent, officers say. South Africa is perhaps excluded – significantly after President Cyril Ramaphosa informed the New York Occasions final week that Trump was ‘really uninformed’ about South Africa and that a few of his insurance policies had been ‘racist.’
Naumann notes that each one these adjustments will improve uncertainty about commerce with the US, for Africa and for the world. He believes Trump’s new 10% surcharge will possible even be litigated and that Congress would in all probability not prolong it past 150 days.
South Africa just isn’t the one African nation baffled by the flurry of US tariffs, counter measures and their influence. In April final yr, the US slapped a weird 50% tariff on Lesotho, the best on the planet, as a result of Lesotho’s restricted clothes and textiles exports to the US had been greater than its restricted imports, making a commerce steadiness in Lesotho’s favour.
Lesotho managed to barter that tariff down to fifteen%. However Commerce and Trade Minister Mokhethi Shelile informed ISS Right now then that it nonetheless left Lesotho at a expensive drawback in comparison with its African opponents, Kenya and Eswatini, which acquired 10%.
Shelile informed ISS Right now this week that the current tariff developments had ‘understandably created some uncertainty for exporters throughout Africa, together with Lesotho.’ For Lesotho, the important thing was not solely the levies themselves however the nation’s place in comparison with opponents akin to Kenya. He mentioned if the brand new 10% tariff was utilized uniformly, that might ‘considerably stage the taking part in area.’
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Even so, any tariff improve made exporting more durable, particularly for small, export-dependent nations like his. ‘Even when opponents face the identical tariff charges, the general impact can nonetheless scale back demand or squeeze margins for our producers.’ And so Lesotho continued to advocate for preferential entry below AGOA and to make sure its exports remained aggressive.
Earlier than Trump was elected, the intention of many advocates of larger Africa-US commerce, together with many in Congress, was to resume AGOA for as much as 16 years. This may improve predictability for potential buyers and would come with North African nations within the provide chains of AGOA beneficiary nations, thereby increasing its scope.
As an alternative, now we have an extension of only a few months in an setting of such confusion that it is laborious to think about anybody committing to export from Africa to the US in any respect.
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Peter Fabricius, Marketing consultant, ISS Pretoria