Latest news with #AfricanGrowthandOpportunitiesAct
The Citizen
20-05-2025
- Politics
- The Citizen
Steenhuisen walks a political tightrope ahead of Trump meeting
Steenhuisen must balance DA principles with GNU unity as he prepares for a delicate engagement with Trump alongside Ramaphosa. Who would fancy being in DA leader John Steenhuisen's shoes right now? Like his government of national unity (GNU) boss Cyril Ramaphosa, he's likely to be pilloried whichever course he takes in the meeting tomorrow at the White House with President Donald Trump. As a minister in the GNU, he is expected to sing from the same hymn sheet as Ramaphosa and deny that there is a genocide of Afrikaners or that white people are being persecuted in South Africa. Yet, if he does so, he will be turning his back on his own party, which has been one of the leading voices against the ANC for its race-based laws. Perhaps even more than Ramaphosa, though, Steenhuisen could play a historic role at that meeting. ALSO READ: What those on the plane to Washington said prior to Trump-Ramaphosa showdown He is white and, with the race-fixated White House, that virtually guarantees he will get treated more sympathetically than Ramaphosa. That means he is in a unique position, with a foot in both South African ideological camps, to pour oil on the troubled waters of the Pretoria-Washington relationship. He has the opportunity to acknowledge the fears of minorities in South Africa, while at the same time disabusing Trump of the belief there is an ongoing wholesale slaughter of these groups back at home. As minister of agriculture, he can put it to Trump that this country needs to be part of an extension to the African Growth and Opportunities Act (Agoa), because it will be those very white farmers who will be harmed most if the US cancels it as punishment for alleged ANC racism. But, if he and Ramaphosa work together as a team, it will send positive messages – to both the Americans and South Africans – that a coalition government built on a nonracial foundation can actually work and lead this country out of the wilderness. NOW READ: Ramaphosa meets Trump: Will Steenhuisen speak out on race-based laws?
The Citizen
24-04-2025
- Business
- The Citizen
SA must ride on the new trade winds
Analysts say now is the time for South Africa to remain on good terms with the rest of the world. The barrage balloon of hot air that is Donald Trump appeared to undergo a significant loss of bombastic pressure this week, backing down in two key areas where he had previously been spitting fire and brimstone. As the US markets tanked – and those around the world followed suit over his outrageous threatened tariffs of up to 245% on Chinese products – he walked back considerably, promising to 'go easy' on Beijing and that the final tariffs would be much lower than what he originally pitched. Then he softened his rhetoric about Federal Reserve Bank chair Jerome Powell, who said the tariffs would damage the US economy, which drew a threat from Trump to fire him. Markets responded positively to those developments, although they are still far from clawing back the trillions wiped off bourses around the world in the wake of Trump's lunacy. For us in South Africa – a mere bit player in any global drama – the effects of the tariffs will still be significant because whatever happens, it seems our preferential ride on duties through the African Growth and Opportunities Act (Agoa) is over. ALSO READ: China risks its moral high ground in escalating trade tensions That means that whatever we export to the US – from cars to fruit – will become more expensive and less competitive. That could cost thousands of jobs back at home as profitability is reduced. Now is the time, though, to remain on good terms with the rest of the world, as agricultural economist Wandile Sihlobo says today, so we can up our exports to places other than America. Also, as Business Leadership CEO Busiswe Mavuso pointed out, government must put in plans to support our motor industry, for which the US is a major market and will be hard hit when Agoa goes. If we can see this storm approaching, we need to batten down the hatches. NOW READ: Ramaphosa treads carefully with Mcebisi Jonas appointment
Yahoo
04-04-2025
- Business
- Yahoo
Trump's tariff whirlwind upends Africa's US trade pact
The United States' flagship economic policy for Africa was effectively killed on Wednesday after US President Donald Trump, reset the global trade world order with a rash of tariffs for countries trying to access the US market, Africa watchers on Capitol Hill said. AGOA (African Growth and Opportunities Act), the preferential trade program which has enabled sub-Saharan African countries tariff-free exports to the US since 2000, is set to expire this September if Congress does not renew it. But, as one Hill staffer told Semafor, its chances of renewal are now 'narrow and windy.' Another Congressional aide explained: 'Timing is everything, so while it's not dead, there are few options to move it forward. Any business planning on its continuation now must assume that the authority will lapse.' Lesotho, Madagascar, Botswana, Angola, and South Africa were the hardest hit in sub-Saharan Africa by Trump's new 'discounted reciprocal' tariff regime. Analysts said African countries would need to work together in order to mitigate the worst impacts of the dramatic reset. 'There is only one way forward: Coordinate and strategize together first,' said Hannah Ryder, founder of Development Reimagined, a consultancy. 'No African country should be reaching out to the US on their own without that coordination first.' Moore, a former Liberian public works minister, also said African cooperation was key, putting critical minerals, local supply chains and access for US companies at the heart of any negotiation. 'Africa, as a unit, should propose a 'deal' using AGOA reauthorization as the vehicle. It cannot be individual countries seeking separate deals.' Overall, African countries 'woefully underutilized' AGOA, said Ken Opalo, a Georgetown University political scientist. 'But in a few countries the promise of access to the US helped attract foreign direct investment and exert positive pressure on pro-business reforms.' In 2023, US imports under AGOA topped $9.7 billion, down from $10.2 billion the previous year. It was dominated that year by $4.2 billion in crude oil trade. It also included around $1.1 billion in apparel and over $900 million in agricultural products. Beyond AGOA, which accounted for around 10%-15% of total US-Africa trade in recent years, it's clear the US runs the biggest trade deficits in dollar terms with Africa's biggest commodity exporters, including South Africa, Angola, Nigeria. 'Because we export mostly unprocessed commodities, very few countries export directly to the US, said Moore. 'Those few countries who do are getting killed since they, like Madagascar and Lesotho, do not import much and the simplistic formula is harsh on countries that don't import much.' In Washington, there's plenty of talk about how AGOA has been great for helping sub-Saharan African countries access the United States, the world's biggest market. But there's a strong sense that AGOA has never quite delivered on its promise of boosting African exports in a meaningful and sustainable way. In fact, with or without AGOA, the US is not a key export market for the vast majority of African countries, say analysts at Renaissance Capital Africa, so most are insulated from the worst impact of this upheaval. The US imported just $39 billion of goods in 2024 from all 54 countries, 'which is roughly what it imports from Mexico or Canada in just over a month.' But as the saying goes, you'll miss it when it's gone. Not so much just the $10 billion of AGOA trade, which was less than 15% of overall US-Africa trade in 2023 but more so what AGOA had come to represent as the flagship US economic policy on the continent. As things stand now, in less than three months, for better or for worse, the US has ripped away the heart of its long-term engagement in Africa by shutting down USAID and upending AGOA. There's also an expectation it will shutter US-Africa Command (Africom). There are many on both sides of these debates who see this moment as a true opportunity to reset the US-Africa relationship. One way or another, we're set to find out what resetting really means. Beyond a few key countries, the US is not an important export market for the vast majority of African countries, say analysts at Renaissance Capital Africa. The US imported $39 billion of goods in 2024, 'which is roughly what it imports from Mexico or Canada in just over a month. The US imports more in 24 hours from either of them (over $1 billion a day), than it imports in a year from about 40 African countries,' Rencap Africa said in an analyst note. The notable exceptions in terms of size are South Africa (37%) and Nigeria (14%) which account for around half of everything the US imports from the continent. Lesotho was hit with a 50% tariff on its US exports, the highest on the continent. The mountainous kingdom is now scrambling to get an envoy over to Washington to 'plead our case,' its Trade Minister Mokhethi Shelile told reporters on Thursday. 'My biggest concern was the immediate closure of factories and job losses,' he said. Lesotho's tiny $2.2 billion economy has been one of the success stories of AGOA. It has built a small manufacturing base of textiles for export with famous brands such as Wrangler and Levi jeans to Trump golf gear. It also exports car parts and diamonds to the US. Altogether it did $237 million in exports to the US in 2024 — equivalent to 10% of its GDP. This has left a huge trade deficit in Lesotho's favor since it doesn't import anywhere near as much from the US.
The Guardian
04-04-2025
- Business
- The Guardian
‘Only job I know': tiny Lesotho's garment workers reel from Trump's tariffs
The day after Donald Trump announced sweeping global tariffs, Lesotho's garment workers feared for their jobs. Last year, Lesotho sent about 20% of its $1.1bn (£845m) of exports to the US, most of it clothing, as well as diamonds, under a continent-wide trade agreement meant to help African countries' development via tariff-free exports. Now, all that is at risk, after the US president imposed a 50% tariff on the impoverished landlocked country, which he claimed last month 'nobody had ever heard of'. Makhotso Moeti migrated to Lesotho's capital, Maseru, from the rural centre of the tiny mountainous kingdom entirely surrounded by South Africa. 'Factory work is the only job I've known for many years,' she said, attaching a label to Gap clothing. 'If the factories shut down, I won't have many options left. I'll be forced to return home to the very poverty I thought I had escaped when I moved to the city.' On Wednesday, Trump unveiled what he claimed were 'reciprocal' tariffs, overturning decades of global trade policy. The tariff rates, which are due to come into force on 9 April, range from 10% to 50% and were calculated with what economists labelled an 'idiotic' formula, penalising countries that have the highest trade surpluses with the US relative to their imports from the US. Dr Ratjomose Machema, a lecturer in economics at the National University of Lesotho, said: 'I don't understand how this is a reciprocal tariff because we really don't charge that much in tariffs.' Lesotho, which has a population of 2.3 million, was hit with the highest rate. In Africa, it was followed by vanilla exporter Madagascar with a tariff of 47%, diamond producer Botswana on 37%, oil-rich Angola with 32%, and the continent's most industrialised economy, South Africa, on 30%. Like the hard-hit, south-east Asian economies, the poor majority in these countries cannot afford expensive American products. In recent decades, China has overtaken western countries to become the largest trading partner of most African countries. According to the African Growth and Opportunities Act (Agoa) US data portal, Lesotho exported $237m of goods last year to the US and imported $2.8m, mostly clothing and diamonds. Agoa, which has allowed tariff-free access to the US market for thousands of product types since 2000, created a thriving garment industry, accounting for about 20% of GDP. There are about 30,000 garment workers in Lesotho, mostly women, with 12,000 making clothes for US brands including Levi's, Calvin Klein and Walmart in Chinese- and Taiwanese-owned factories. While most of the jobs pay the monthly minimum wage of $146-$163, they are still highly sought after in the poor, largely informal economy. In Madagascar, which has a population of about 32 million, Agoa has also nurtured a significant garment sector, which employs about 180,000 people in a country where GDP per head is just $575. In 2024, the island nation exported $733m of goods to the US, with clothing the top export, followed by vanilla. Sign up to First Thing Our US morning briefing breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion Ketakandriana Rafitoson, a political science researcher at the Catholic University of Madagascar, said: 'The textile and apparel sector is really a cornerstone of Madagascar's economy … [Tariffs] will have a drastic effect on the country.' The future of Agoa, which will expire in September if it isn't renewed by the US Congress, was already looking precarious before Trump's announcement. Lesotho's trade minister, Mokhethi Shelile, said officials, who had been preparing to travel to the US to ask for an Agoa extension, would argue that the tariff calculations didn't include digital services from US companies such as Android and Microsoft. He added: 'That being said, we recognise that we cannot rely solely on the American market.' A fact sheet published by the White House to accompany Trump's tariff announcement said: 'Today's action simply asks other countries to treat us like we treat them. It's the golden rule for our golden age.' In Lesotho, Nthabiseng Khalele, a garment worker sheltering from the rain after a long day in the factory, said: 'My hope and wish is that our prime minister could somehow reach out to President Trump and ask him to at least show some compassion for Lesotho. If we lose our jobs here, I'm almost certain that many of us will end up sleeping on empty stomachs.'
Bloomberg
04-04-2025
- Business
- Bloomberg
Trump Tariffs to Supersede US Congress-Backed Africa Trade Pact
By and Mathabiso Ralengau Save President Donald Trump's tariffs on most of the US's trading partners will undermine a 25-year-old pact that gave many of the poorest African nations duty-free access to the world's biggest economy. Trump's tariffs — as high as 50% on the kingdom of Lesotho — will supersede the African Growth and Opportunities Act, said a White House official, speaking on condition of anonymity to discuss the details of the tariff plan. AGOA was endorsed by the US Congress and signed into law by former President Bill Clinton in May 2000.
