Trump and the African Growth and Opportunity Act

Young Diplomats Society
2 days ago
3 min read

By Daniella Byishimo

The African Growth and Opportunity Act (AGOA) is a trade agreement that provides eligible Sub-Saharan countries with tariff-free access to the US market. This agreement was enacted by the US Congress in 2000. Since then, it has been at the centre of US economic policy in Africa. The AGOA Act is set to expire on September 30, 2025, and with Trump’s pushback on free trade, it is uncertain whether the Act will be renewed again.

For two decades now, the AGOA has allowed over 1,800 African products duty-free entry to the US. About 32 countries are trading with the US under the agreement. President Bill Clinton enacted Itt in hopes that it would promote democratic ideals on the continent as well as open up the US market to diversified consumers. The projection of Africa as the fastest-growing region in population and economy also influenced the creation of the agreement. By embracing trade relations with Africa, US policymakers were hoping for the region to begin diversifying its economies.

However, after two decades of being active, the AGOA has received mixed outcomes and reactions. Initially, policymakers assumed the agreement was successful as the US saw an increase in imports of African products. In 2008, total African exports under AGOA peaked at 81%. Some countries were able to diversify their economies and benefit from AGOA -for example, South Africa’s automotive industry and the apparel industry across the continent. South Africa’s automotive exports increased from $195 million in 2000 to $1.8 billion in 2013. Furthermore, between 2010 and 2020, the apparel industry grew by 60%, amounting to approximately $1.4 billion, which is about double the value of the 2000s decade.

These figures demonstrate that AGOA has resulted in job creation; therefore, its end would mean that numerous people on the continent would end up unemployed. Despite these impressive figures that showcase a net benefit to some African economies, AGOA has not been an immense success. A significant issue is that the agreement is not being used effectively, and as a result, its impact has been uneven across the continent, as only a select few countries have crafted policies that effectively utilise AGOA. Additionally, countries with a more developed political economy are more likely to benefit from AGOA, as they attract US investors and increase exports. Economic diversification is also an important factor, as only a few countries have diversified exports. Africa as a whole continues to struggle with economic diversification, hence it is not surprising that some countries on the continent are unable to utilise the agreement effectively. In fact, due to the lack of the aforementioned factors, some countries have not seen any benefits from AGOA.

Earlier this year, President Trump imposed a universal 10% baseline tariff on all countries. This movie has been viewed as a threat to the future of AGOA. This is especially true given that the US Congress is considering extending the agreement for another 16 years. With tiny Lesotho facing a 50% tariff, there is a growing fear of what Trump’s plans are for future trade with Africa. In 2024, Nigeria and South Africa, the main beneficiaries of AGOA, exported only 1% of their GDP worth of exports to the US. This raises the question as to whether AGOA has even had any significant impact on Africa’s external trade flow. Thus, it is uncertain how African states would react to its end.

If Trump were to end the AGOA, there would be short-term unemployment in AGOA-reliant industries like South Africa’s automotives and apparel production in Kenya, Lesotho, and Ghana to some extent. It would also result in high costs of doing business. Other than these short-term losses, does Africa stand to lose much from the discontinuation of AGOA? Most countries on the continent are now prioritising trade relations with the EU and especially China. China has now surpassed the US as Africa's largest trading partner. Africa’s shift towards Beijing is a concern for US policymakers, so Trump must be cautious when determining US trade relations with Africa. Just recently, China announced its plans to remove tariffs on all 53 African countries. In 2023, China received $170 billion worth of African exports, while the US received $39.5 billion worth of African goods in 2024.

Additionally, the recent African Continental Free Trade Area (AfCFTA) will further elevate African economies through regional trade. Hence, Africa has options, whether AGOA continues or discontinues, the continent can continue to develop. The question is whether Trump is willing to risk economically isolating Africa, the world’s fastest-growing continent in both economy and population. That appears highly unlikely.

Daniella Byishimo is the Regional Correspondent for Sub-Saharan Africa at the YDS. She is currently a third-year International Relations student at the Australian National University. With a keen interest in economic development across the African region, she aspires to build a career in international development.