PREVIEW
Washington has shifted focus, leaving 33 African states uncertain about future trade prospects but creating an opportunity for China
The African Growth and Opportunity Act (AGOA), which offers tariff and quota-free United States trade for 33 African states, looks set to follow the United States Agency for International Development (USAID) into the dustbin of history.
Many Republicans had argued that AGOA should be retained to provide African states with a reliable trade alternative to China. Last September, China announced that it would offer preferential trade terms to all low-income African countries.
Ahead of November’s US general elections, there was a broad bipartisan majority in Congress for AGOA to be extended ahead of its expiry in September. Some analysts expected that countries like Uganda, which lost their AGOA access during Joe Biden’s presidency after the passing of an anti-homosexuality law, would regain access (Dispatches 16/4/24, Taking the politics out of AGOA). However, four Republican Congressmen have called for South Africa to lose AGOA access, citing its new expropriation of land bill (AC Vol 66 No 1, Political marriage holds together).
President Donald Trump’s ‘America First Trade Policy’ executive order, issued on 20 January, just hours after he took office, tasked the US Trade Representative, the Treasury department, and the Commerce department with reviewing all US trade deals by 1 April.
Although Trump has promised to impose tariffs on the BRICS group, which now includes Egypt and Ethiopia along with South Africa, African states are not his main priority in a trade war that has seen him either impose, or threaten to impose, tariffs on Canada, Mexico, China and the European Union.
While AGOA is largely an exercise in goodwill – the US$9.7 billion worth of imports to the US in 2023 under AGOA is a tiny percentage of the $3.9 trillion of global US imports – the dismantling of USAID has left many African states facing budget shortfalls, particularly in education and health. This suggests to many African governments that Trump is not interested in soft power or traditional diplomacy (Dispatches 28/1/25, Rubio deals hammer blow to US aid).
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