Agoa extension offers little relief as US trade chaos rattles African exporters

Like most of the world, Africa is perplexed by the rollercoaster ride of shifting United States trade policy. That is particularly true of the changes to Agoa – the African Growth and Opportunity Act – in place since 2000. The arrangement gives 32 African countries duty-free access to the lucrative US market for most exports, without needing to reciprocate.

In April 2025, US President Donald Trump slapped large “reciprocal” tariffs on most countries worldwide under the International Emergency Economic Powers Act. These tariffs wiped out most of Agoa’s advantages, and the agreement lapsed on 30 September, with Trump showing no inclination to renew it.

The International Emergency Economic Powers Act tariffs and uncertainty about Agoa’s renewal have badly dented African exports to the US. According to the Trade Law Centre, Agoa exports dropped 32% in the year ending November 2025 compared with 2024.

South African auto exports, which had been a major Agoa beneficiary, plunged almost 75% in 2025 from 25,544 vehicles to 6,530. South African automakers managed to find enough alternative buyers to boost overall 2025 exports by almost 6% to a record 414,268 units.

Then, against the odds, the US Congress this year passed legislation – as part of a wider budget bill – to extend Agoa until 31 December 2026, retroactively from 30 September 2025. Trump signed the law into effect on 3 February.

Benefits overridden by other measures

But that seemed too little, too late. As Donald MacKay, Director at XA Global Trade Advisors noted, resuscitating Agoa was largely meaningless as its benefits were overridden by other measures. These included the International Emergency Economic Powers Act tariffs as well as tariffs on certain products such as automobiles, steel and aluminium under section 232 of the Trade Expansion Act.

Then, barely two weeks after Agoa was extended, the US Supreme Court rescinded Trump’s reciprocal tariffs on 20 February, saying he had exceeded his authority under the International Emergency Economic Powers Act. Trump reacted by imposing a 10% tariff increase on all countries under section 122 of the 1974 Trade Act. This came into effect on 24 February and will expire on 24 July. Trump has threatened to increase it to 15%.

As Eckart Naumann, independent economist and associate at Trade Law Centre notes, Trump appears to be seeking alternative ways to fully replace the International Emergency Economic Powers Act tariffs the court struck down. Naumann also says the new developments have increased uncertainty.

That is certainly true. As Naumann notes, Agoa’s renewal restores the preference margin for beneficiary countries, although the new section 122 surcharges still apply to them. That means the number of duty-free tariff lines is much smaller than it was a year ago (before the International Emergency Economic Powers Act tariffs).

Naumann says that, according to 2025 trade data, 80% of Agoa countries’ baseline exports to the US would now be exempt from section 122 surcharges. For SA, the tariff is reduced from 30% to 10% (for goods not already subject to section 232 tariffs or exempt from section 122 tariffs, such as certain minerals, chemicals and foodstuffs). This ought to be a considerable advantage when coupled with Agoa’s restoration.

Disproportionate burden

Naumann notes though, that despite its baseline tariff reduction, SA still faces a disproportionate burden compared to other Agoa beneficiaries, because of the tariffs on autos (25%) and steel and aluminium (50%).

And how long SA might benefit from the Agoa revival is by no means clear. The US’ annual decision on which sub-Saharan countries are eligible for Agoa (usually issued in December) is imminent, officials say. SA might be excluded – particularly after President Cyril Ramaphosa told the New York Times last week that Trump was “truly uninformed” about SA and that some of his policies were “racist”.

Naumann notes that all these changes will increase uncertainty about trade with the US, for Africa and for the world. He believes Trump’s new 10% surcharge will probably also be litigated and that Congress would probably not extend it beyond 150 days.

SA is not the only African country baffled by the flurry of US tariffs, countermeasures and their impact. In April last year, the US slapped a bizarre 50% tariff on Lesotho, the highest in the world, because Lesotho’s limited clothing and textiles exports to the US were more than its limited imports, creating a trade balance in Lesotho’s favour.

Lesotho managed to negotiate that tariff down to 15%. But Trade and Industry Minister Mokhethi Shelile told ISS Today then that it still left Lesotho at a costly disadvantage compared with its African competitors, Kenya and Eswatini, which received 10%.

Uncertainty

Shelile told ISS Today this week that the recent tariff developments had “understandably created some uncertainty for exporters across Africa, including Lesotho”. For Lesotho, the key was not only the levies themselves but the country’s position compared with competitors such as Kenya. He said if the new 10% tariff was applied uniformly, that could “somewhat level the playing field”.

Even so, any tariff increase made exporting harder, especially for small, export-dependent countries like his.

“Even if competitors face the same tariff rates, the overall effect can still reduce demand or squeeze margins for our producers.” And so Lesotho continued to advocate for preferential access under Agoa to ensure its exports remained competitive.

Before Trump was elected, the intention of many advocates of greater Africa-US trade, including many in Congress, was to renew Agoa for up to 16 years. This would increase predictability for potential investors and would include North African countries in the supply chains of Agoa beneficiary countries, thereby expanding its scope.

Instead, we have an extension of just a few months in an environment of such confusion that it’s hard to imagine anyone committing to export from Africa to the US at all. DM

Peter Fabricius is a Consultant, Institute for Security Studies (ISS) Pretoria.

This article was first published by ISS Today.