The African Growth and Opportunity Act (Agoa) has been a key initiator of US – Africa economic relations for the past 25 years. Today, that future is suddenly in doubt. Agoa was designed to increase trade and foster economic development across Africa. Specifically, it guarantees that select products from all 49 African countries can be imported by American retailers and sold to American consumers tariff-free. Recent retaliatory tariffs from the Trump administration have planted the seeds of doubt in African countries. They fear their preferential trade deal’s sustainability.
Agoa was meant to help industrialize Africa, and create jobs that would pull millions of countries out of poverty. With its renewal up for consideration later this year, many stakeholders are apprehensive about the implications of the current U.S. trade policies. The act has been an underused but important tool of U.S. soft power. It’s particularly timely, because it helps push back against the expanding footprint of China and Russia across Africa.
In 2023, two-way trade under Agoa totaled $47.5 billion, highlighting its crucial role in U.S.-Africa economic ties. By providing mutually agreed upon stable and predictable rules for trading, the act has built a shared benefit. This cooperation framework has become a touchstone of the economic relationship between the two regions.
Now, due to the imposition of reciprocal tariffs under the Trump administration, things have taken a troubling turn. South Africa’s foreign and trade ministers stated, “The reciprocal tariffs effectively nullify the preferences that sub-Saharan Africa countries enjoy under Agoa.” This sentiment is indicative of a growing concern among African nations regarding their impending loss of duty-free access to the hotly contested U.S. market.
A leading public policy analyst Michelle Gavin, in an opinion piece, lamented that this is the wrong U.S. approach to Africa right now. During the hearing, she reiterated that there’s no strategy or plan from the administration. She further emphasized the potential consequences of neglecting African relations, describing it as “a withdrawal, an ignoring of an entire huge region of the world.”
The implications of these tariffs would be dire for Lesotho. The future of the country’s textile industry too is largely reliant on the advantages offered by Agoa. Mukhisa Kituyi, former Secretary-General of UNCTAD, remarked that “a tariff of 50% sounds like a death knell to the Agoa manufacturing in Lesotho.” Tariffs like these would not only threaten jobs already in place, but could stop new investments from coming to the region.
The fear and doubt over Agoa’s future is tangible. Most African countries are understandably afraid that they would be at a competitive disadvantage against textile garment exporters such as Vietnam and Sri Lanka. In practice, the act has passed a tremendous economic benefit to African nations. Secondly, it gives them access to the U.S. market without incurring large tariffs.
As discussions on Agoa’s renewal continue, stakeholders on both sides will have vigorous debates about this provision. Their intent is to fix these tariffs so that the wonderful benefits of this act can resume helping African countries. The recent loss of Agoa would be a huge negative shock to trade dynamics. It would undoubtedly cause more far-reaching economic repercussions on the countries that rely on its terms for their long-term growth and development.