Steep Trump tariffs ‘pull Agoa rug out’ from under Africa

Antananarivo — The Trump administration’s imposition of steep tariffs on African nations signals the end of the African Growth and Opportunity Act (Agoa) trade deal that was supposed to help African economies develop through preferential access to US markets, trade experts said on Thursday.

Several African countries were hit by some of the highest tariffs announced by US 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 SA, the continent’s biggest exporter to the US.

Many of the hardest-hit countries are already struggling with high levels of poverty, debt and disease, as well as other severe challenges such as food shortages, or in Madagascar's case cyclones. SA and Lesotho have the world’s highest HIV/Aids prevalence.

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 SA.

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 US policy towards the continent since the 1990s era of former 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 SA’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. 

Fresh blow

In SA, where the US is the second-largest trading partner 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 US, 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 SA, the country that overcame apartheid, over what he described as discriminatory policies against white people.

US-SA relations have soured since Trump cut US financial aid to the country, citing among issues disapproval of SA’s Expropriation Act 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 US, which will kick in from Thursday.

SA’s exports of vehicles and parts into the US are estimated at more than $2bn and could be hit hard by the levies.

Industry & competition minister Parks Tau said at an investment conference in Johannesburg that the global economic uncertainty was affecting demand for SA’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,” he said.

In 2024, US imports from SA totalled $14.7bn, up 4.9% from 2023, according to the Office of the US Trade Representative.

Major SA exports to the US include precious stones and metals, motor vehicle parts and accessories, iron and steel, machinery and aluminium products.

Lesotho, a tiny landlocked country surrounded by SA, is the second-largest exporter of textiles and garments to the US under Agoa. In 2024 it exported goods worth $237m into the US, a 4.7% increase over 2023. 

Reuters