Trump’s Tariffs Spell Disaster for South Africa and AGOA, Threatening Thousands of Jobs

President Donald Trump’s aggressive new tariffs on US trading partners are set to dismantle a decades-old trade pact that has been a lifeline for Africa’s poorest nations. The African Growth and Opportunity Act (AGOA), which allowed duty-free access to the US market, is now under threat—and the consequences could be devastating.

The End of AGOA?

AGOA, signed into law by former President Bill Clinton in 2000, has been a cornerstone of US-Africa trade relations. But Trump’s latest tariffs—some as high as 50% on Lesotho—will override these benefits, according to a White House official.

This move comes just weeks after the Trump administration froze billions in aid to Africa, compounding economic pain for nations like Lesotho, Madagascar, and Mauritius. Without duty-free access, these countries now face steep levies that could wipe out entire industries.

A Jobs Crisis in the Making

The fallout is already visible. When Ethiopia lost AGOA benefits in 2021 due to its civil war, 18 major companies—including PVH Corp. (owner of Calvin Klein and Tommy Hilfiger)—pulled out, costing 11,479 jobs, according to Ethiopia’s central bank.

Now, Lesotho—a small nation surrounded by South Africa—fears a similar disaster. 12,000 textile jobs are at risk, says Trade Minister Mokhethi Shelile. That’s a third of the country’s formal employment outside government work.

South Africa’s Trade Minister, Parks Tau, warns that the tariffs will “literally devastate” Lesotho, which relies heavily on clothing and diamond exports.

Broader Economic Shockwaves

The collapse of AGOA doesn’t just hurt individual nations—it disrupts global supply chains and undermines years of economic progress.

• African economies have used AGOA to diversify beyond raw materials, building manufacturing and textile industries.
• Without US markets, African producers must find new buyers fast—or face mass layoffs and factory closures.
• South Africa, which sends 7.45% of its exports to the US, may see key industries shrink.

Legal Challenges and Uncertain Future

Tau suggests the move could be challenged in US courts, but time is running out. AGOA expires in September 2025, and the White House has not confirmed if Trump will extend it.

Who Escapes the Worst?

Not all African nations will suffer equally. The US exempted energy products, copper, and critical minerals from tariffs, sparing major oil exporters like Angola and Nigeria.

But for labor-intensive sectors—especially textiles—the damage could be irreversible.

A Major Shift in US Trade Policy

This marks a stark reversal from decades of US policy promoting free trade to boost developing economies. Clinton and Bush expanded AGOA to help African businesses reach US consumers. Now, Trump’s tariffs may undo that progress overnight.

The Bottom Line:
Thousands of jobs hang in the balance. If AGOA collapses, African economies will face a brutal scramble to adapt—or risk economic regression.

{Source BusinessTech}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com