Africa’s trade deal with the US left in limbo

The US–Africa preferential trade deal – in place for a quarter of a century – expired on 30 September 2025. It remains uncertain whether the trade deal will be renewed and, if so, how. Through the African Growth and Opportunity Act (AGOA), around 35 sub-Saharan African countries were able to export thousands of products to the American market duty-free.First signed into law in 2000, AGOA was designed to encourage African exports, create jobs, and deepen trade ties. Its use varied widely: South Africa shipped cars and citrus; Kenya and Ethiopia focused on apparel; Lesotho and Eswatini relied heavily on garments; and Mauritius exported textiles and seafood.These exports support hundreds of thousands of jobs, many held by women and young workers in areas where formal employment is scarce. For African exporters, a world without AGOA and with broader US tariffs, represents a double squeeze on competitiveness.Whether AGOA will be revived at all, or quickly enough, depends on the US Congress rather than the White House, which has publicly supported a one-year extension. Transitional deals are being floated, but only enacted legislation can restore certainty. If the deal remains suspended or uncertain, the sharpest pain will fall on smaller, apparel-focused exporters employing many low-income workers.If Congress cannot agree swiftly, the lapse will continue. Even if renewal comes later, some damage such as cancelled orders and lost shifts will already have occurred, and any retroactive fix will be uneven across sectors and firms. Uncertainty is costly: ambiguity surrounding AGOA’s renewal dampens orders and investment, particularly in labour-intensive sectors such as apparel and automotive components.Key measuresAmid the present economic uncertainties, AGOA exporters should prioritise three key measures.First, take steps to redirect vulnerable orders to EU preference schemes and regional buyers under the African Continental Free Trade Area (AfCFTA). Second, invest in competitiveness through improved ports and predictable customs procedures. Finally, lobby strategically in Washington to argue for a short, retroactive “bridge” renewal.Duty-free status matters for Africa. Take the case of a basic cotton T-shirt from Kenya or Lesotho: under AGOA, it enters the US duty-free; without AGOA, the standard most-favoured-nation duty is around 16.5% on cotton T-shirts. That margin alone can erase profits and redirect orders.Between 2001 and 2021, the US imported US$791 billion worth of goods from AGOA-eligible countries. In comparison, the total US economic assistance to these countries from 2001 to 2019 amounted to US$145 billion. The stark difference highlights the significance of AGOA in US–Africa economic relations.The trade preferences have particularly benefited apparel, textiles, agriculture, and light manufacturing. However, the impact has been uneven. Some countries have taken greater advantage of the opportunities than others, so the consequences of a lapse will likewise vary among exporters.Who is hit hardest?Apparel: Lesotho, Eswatini, Madagascar, Kenya and Mauritius built entire export bases around AGOA’s duty-free access for clothing. Without it, typical US most-favoured-nation tariffs (usually 10–20%) apply immediately. Razor-thin margins vanish, orders are cancelled, and factory closures and job losses follow swiftly.Cars and fruit: South Africa’s shipments of vehicles, parts, wine, citrus and nuts also face new tariffs. These globally competitive sectors are highly cost-sensitive; the loss of preferences undercuts automotive supply-chain investment and farm incomes.Oil exporters: Crude oil generally faces low US tariffs, so countries such as Nigeria and Angola are less affected than non-oil manufacturers and farmers.What African exporters can doGiven the mix of US statute and presidential practice, there are three realistic paths out of the current trade limbo.Congress could pass a multi-year extension in the coming weeks, restoring certainty for buyers and factories. Another option is a short “bridge” renewal, with lawmakers agreeing to a one- or two-year extension. This would avert a cliff-edge but keep investment subdued, as buyers place smaller, repeat orders and postpone new product lines until the long-term outlook is clear. The final option is continued lapse.While uncertainty persists, African exporters can take several practical measures to stabilise business operations.Plan for uncertainty: Redirect vulnerable orders to the European Union’s preference schemes. Use the Generalised Scheme of Preferences and relevant Economic Partnership Agreements where rules of origin are met. Also, pivot to regional buyers under the African Continental Free Trade Area (AfCFTA).This can be combined with logistics improvements such as:&bull; Pre-clearance: allowing customs processing before goods reach port, cutting dwell times.&bull; Single-window customs: a digital portal where all trade documents are submitted once, reducing delays and paperwork.&bull; Scheduled sailings: fixed, reliable shipping timetables that shorten delivery cycles and boost buyer confidence.Bridging gapsTogether, these steps can improve margins through faster lead times. Governments can also help bridge working-capital gaps for affected firms via trade guarantees or invoice discounting, ensuring confirmed orders don’t collapse. They should maintain a standing public–private task force ready to adjust as US decisions evolve.Affected countries should coordinate with embassies and major exporters to present concrete evidence such as buyer letters, job statistics, and likely US price pass-through, to advocate for a short, retroactive “bridge” renewal. They should stress that predictable access supports US supply-chain diversification away from China and stabilises consumer prices.Messages should be aligned across sectors – apparel, automotive, and agro-processing – to demonstrate broad economic impact rather than narrow sectoral lobbying. Timing outreach to coincide with congressional sessions and committee calendars is crucial.Finally, ttrade officials should focus on reliability. Dependable power supply, efficient ports, and predictable customs processes often matter more to buyers than wages alone. Build regional inputs (such as yarn-to-garment, packaging, and parts) so that a shock in one market doesn’t halt production. Expand testing and certification to ensure products meet US, EU and UK standards.Value chainThe goal should be to move up the value chain – from free-on-board or full-package operations (for example, in apparel, handling not just cut-make-trim but also sourcing and logistics) to components, branded goods and ready-to-eat products, where margins are stronger. Investment incentives should be tied to measurable outcomes: jobs created, on-time delivery, and clean production.For three decades, African governments have been urged to liberalise and build export capacity on the promise of predictable trade rules. A sudden US pullback shifts the goalposts – raising prices at home, cutting jobs abroad, and narrowing the scope for rules-based trade.Exporters can buy time through EU routes, regional buyers, and logistics fixes. But only Congress can restore certainty: pass a short, retroactive bridge renewal now, then set a clear timeline for a multi-year AGOA update. – The Conversation* Bedassa Tadesse is a Professor of Economics at the University of Minnesota Duluth.

Africa’s trade deal with the US left in limbo

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Republikein 2025-11-05

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Africa’s trade deal with the US left in limbo

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