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US President Donald Trump has signed a law extending duty-free access to qualifying nations under the African Growth and Opportunity Act (Agoa) to 2028, but this falls far short of the 15 years South Africa was pushing for.It is also not yet clear whether the country, which has been slapped with punitive US tariffs — partly over policy differences that have led to frosty relations with Washington — will remain a beneficiary of the trade pact.The White House confirmed that, on Wednesday, Trump signed into law the Continuing Appropriations and Extensions Act, 2027, which, among other provisions, “extends authorities for a broad range of programmes, including surface transportation and veteran programmes”.According to the US Congress, the act extends several expiring authorisations, including authorities and programmes related to “trade preferences for Haiti and certain countries in Sub-Saharan Africa”. Congress also confirmed Trump had signed it into law.First enacted in 2000 as part of a push by the US to shift its engagement with Sub-Saharan Africa away from traditional aid and emergency relief toward trade-led economic development and investment, Agoa was extended for 10 more years in 2015.The pact expired in September 2025 after Congress failed to agree on a renewal, but Trump signed legislation in February this year extending it to end-2026.Earlier this year, the department of trade, industry & competition submitted a defence of its eligibility for Agoa despite its upper-middle-income country status to the office of the US trade representative, pushing for a 15-year extension of the duty-free pact.It argued that a short-term renewal or lack of certainty over Agoa “harms both South African and US trade and investment and undermines predictability in trade”.Some of the South African companies that have made big investments in the US include Sibanye-Stillwater and Sasol, the latter’s $12.6bn investment in the Lake Charles Chemicals Project in Louisiana being the largest investment by an African company in the country.The office of the US trade representative has accused South Africa of maintaining high tariffs on US poultry, wine and spirits, while providing preferred access to the EU, and of imposing unjustified animal health restrictions on US pork products.South African passenger vehicles, relevant auto parts, steel and aluminium are subject to a 25% tariff under section 232 of the US Trade Expansion Act. South Africa was also hit with a 12.5% section 301 tariff from July, although products already subject to section 232 are exempt from that.The business sector says as a result, vehicle export earnings to the US fell to R8bn in 2025 from about R17.7bn in 2024.A trade, industry & competition spokesperson told Business Day on Thursday that the department would issue a statement on the Agoa extension. It had, however, not done so by the time of publication.Politically, the extension would be a win for the continent, particularly against the backdrop of Trump’s transactional America First trade policy, independent global advisory and forecasting firm Oxford Economics said.“It is especially significant for South Africa, which accounted for about half of the $8.23bn (R140bn) in goods exported under Agoa in 2024, according to US International Trade Commission data,” it said.But the advisory firm added that other US tariffs have reduced the practical benefits of duty-free access, while the short-term renewal is unlikely to ease business concerns over the longer-term outlook for bilateral trade. Trump retains the authority to determine Agoa eligibility annually. As the office of the US trade representative formally launched the 2027 eligibility review in June this year, the current list could still be revised before the next determination takes effect on January 1 2027.“Eligibility requires countries to demonstrate progress towards a market-based economy, the rule of law, political pluralism and respect for due process,” Oxford Economics said.“Consequently, it creates an additional source of uncertainty for countries with strained relations with Washington, particularly Nigeria over security concerns, Tanzania over democratic credentials, and South Africa amid a broader deterioration in bilateral relations with the US.”The Motor Industry Staff Association (Misa) welcomed the Agoa extension.“The automotive sector is South Africa’s most successful manufacturing industry, heavily reliant on long-cycle investment. South Africa exports billions of rand worth of finished passenger vehicles and components duty-free to the US; therefore, this will benefit the industry,” spokesperson Phakamile Hlubi-Majola told Business Day.However, labour union Solidarity was cautious in its celebration, citing “the ongoing debate in Washington over South Africa’s future eligibility for Agoa” and warning that exclusion would have a devastating impact on local industries, particularly the vehicle and agricultural sectors, and put thousands of specialised jobs at risk.Solidarity has clashed with the South African government over policy but rejected the cabinet’s accusation that it was running a misinformation campaign against the country, going so far as to launch a defamation case against minister in the presidency, Khumbudzo Ntshavheni. The union argues that it has in fact intervened for South Africa with the Trump administration “after the government had caused a diplomatic crisis with its most important trading partner”.“We will intensify these efforts in the coming days and weeks as the White House finalises the list of eligible countries for 2027,” head of public liaison at Solidarity Jaco Kleynhans said in a statement on Thursday.“Our campaign has focused on direct engagement so far. This includes visits to the White House and the US Congress, as well as the submission of comprehensive economic impact studies highlighting the mutual benefits of bilateral trade and Agoa in particular.”Business Day
