Steep US tariffs on Africa signal end of trade deal meant to boost development

Reuters

03-04-2025

JOHANNESBURG/ANTANANARIVO, April 3 (Reuters) - The U.S. government's imposition of steep tariffs on African nations signals the end of the AGOA trade deal that was supposed to help African economies develop through preferential access to U.S. markets, trade experts said on Thursday.
Several African countries were hit by some of the highest tariffs announced by U.S. President Donald Trump on Wednesday, including levies of 50% on goods from Lesotho, 47% for Madagascar, 40% for Mauritius, 37% for Botswana and 30% for South Africa, the continent's biggest exporter to the U.S.
Many of the hardest-hit countries are already struggling with very high levels of poverty and debt as well as, in some cases, other severe challenges such as food shortages or cyclones in Madagascar, and one of the world's highest rates of HIV/AIDS infections in Lesotho.
The tariffs also compound the pain for Africa after Trump's administration dismantled USAID, the government agency that was a major supplier of aid to the continent, and specifically cut bilateral aid to South Africa.
The AGOA trade accord is due to expire in September, and the raft of tariffs suggests that a renewal of the deal, a major part of U.S. policy towards the continent since the 1990s era of President Bill Clinton, is extremely unlikely.
"The reciprocal trade announcement policy will pull the AGOA rug from under our feet. That will be gone. It will replace AGOA, you don't have to wait for September. It'll be gone before then," said economist Adrian Saville, a professor at South Africa's Gordon Institute of Business Science.
It was unclear whether AGOA tariff exemptions on certain goods would continue to be applied between now and September in the wake of Trump's tariff barrage.
"There is no indication that imports under AGOA are exempt from the 10% tariffs, so it appears that effectively immediately AGOA imports that previously were duty-free are now subject to a 10% duty," the Washington-based African Coalition for Trade said in a memo to members on Thursday.
"This is obviously not a positive sign for the outlook for renewal of AGOA."
However, the permanent secretary at Kenya's foreign ministry, Korir Sing'Oei, said his understanding was that tariff exemptions under AGOA would remain valid until the act's expiry.
In South Africa, whose second largest trading partner is the U.S., after China, the government struck a hopeful note despite the blow.
"The tariffs affirm the urgency to negotiate a new bilateral and mutually beneficial trade agreement with the U.S., as an essential step to secure long-term trade certainty," the presidency said in a statement.
But a new trade deal with Washington looks like a mountain to climb for Pretoria.
Trump has repeatedly lambasted South Africa, the country that overcame apartheid, over what he described as discriminatory policies against white people.
U.S.-South African relations have soured since Trump cut U.S. financial aid to the country, citing disapproval of its land policy and its genocide case at the International Court of Justice against Washington's ally Israel.
Trump's latest tariffs are in addition to the 25% imposed on all vehicles and car parts imported into the U.S., which will kick in from Thursday.
South Africa's exports of vehicles and parts into the U.S. are estimated at over $2 billion and could be hit hard by the levies.
Speaking at an investment conference in Johannesburg, South African Trade Minister Parks Tau said the current global economic uncertainty was affecting demand for South Africa's products and its ability to create jobs.
"If there is one message that we must convey today, it is that diversifying trade relationships is absolutely critical."
In 2024, U.S. imports from South Africa totalled $14.7 billion, up 4.9% from 2023, according to the Office of the United States Trade Representative.
Major South African exports to the U.S. include precious stones and metals, motor vehicle parts and accessories, iron and steel, machinery and aluminium products.
Lesotho, a tiny landlocked country surrounded by South Africa, is the second largest exporter of textiles and garments to the U.S. under AGOA. In 2024 it exported goods worth $237 million into the U.S., a 4.7% increase over 2023.