Factbox-The US-Africa trade programme under threat from Trump tariffs

Yahoo

03-04-2025

By Nqobile Dludla and Nellie Peyton
JOHANNESBURG (Reuters) - President Donald Trump has moved to impose sweeping tariffs on most goods imported to the United States, including from African countries that benefit from a U.S. flagship trade programme for the continent.
Analysts say the new tariffs suggest that the renewal of the initiative, known as the African Growth and Opportunity Act (AGOA), is extremely unlikely.
Here are some key facts about the trade accord:
WHAT IS AGOA?
AGOA is a U.S. trade initiative passed in 2000 under former President Bill Clinton to deepen trade ties with Sub-Saharan Africa and help African countries develop their economies.
It provides duty-free access to the U.S. market for thousands of products including motor vehicles and parts, textiles and clothing, minerals and metals, agricultural products and chemicals exported by eligible African countries.
It has been renewed twice and is due to expire in September 2025.
WHO BENEFITS?
About 35 African countries are currently eligible. Countries can lose and regain eligibility based on criteria including economic policies and protection of human rights.
A number of countries including South Africa, Nigeria, Ghana, Kenya, Lesotho, Madagascar and Ethiopia have successfully used AGOA to boost exports to the U.S., drive industrialization and create jobs, especially in textiles, automotives and minerals including crude oil.
The United States benefits by furthering its interests on the continent. It also gains access to critical minerals and investment opportunities.
Countries that undermine U.S. national security or foreign policy interests are not eligible for AGOA.
U.S. lawmakers view it as an important soft power tool, particularly as a counter to Chinese influence.
Sectors such as South Africa's automotive industry as well as Kenya and Lesotho's clothing sectors would be hit hardest from a sudden rise in tariffs or non-renewal of AGOA.
WHAT DO CRITICS SAY?
Many analysts have said that AGOA is under-utilized.
Only about half of eligible countries have developed national AGOA utilization strategies, and the majority of exports come from just a few of them.
While the apparel sector and automotive industry have been the programme's biggest success stories, other industries have lagged.
U.S. imports from AGOA beneficiaries peaked in 2008 at $82 billion and had fallen to $29.1 billion in 2024, according to the AGOA website.
Some analysts say AGOA has had a positive impact but that it needs to be updated and improved to include newer industries such as technology and digital services.
WHAT HAPPENS NOW?
African countries want a 10-year extension, but economists say that the Trump administration's protectionist trade policies mean AGOA's renewal is unlikely.
The new tariffs have heightened the risk that AGOA may be scrapped altogether even before it expires, unless the region presents strong bargaining chips to keep it in place, analysts say.
Government officials from South Africa and Madagascar said they were waiting for clarity on whether the reciprocal tariffs announced by Trump will be applied to goods that are exported under AGOA.
AGOA's extension requires a decision of the U.S. Congress and is thereafter signed into law by the U.S. President.