AGOA extended for a year, but how much will it help SA business in view of Trump tariffs?

US President Donald Trump has finally signed into law legislation that reauthorises the African Growth and Opportunity Act (AGOA), with South Africa's inclusion.

AGOA exempts eligible African countries from taxes on their exports to the US, and South Africa's status had been uncertain amid continued strained relations with Washington.

However, Trump has extended the agreement for barely a year - till the end of December 2026.

Trade and Industry Minister Parks Tau welcomed the move, although he expressed the hope that the limited extension is the first step towards more certainty around investment and business decisions.

Ministerial spokesperson Kaamil Alli commented that the AGOA extension "comes at a time when South Africa continues to engage constructively with the United States on an Agreement on Reciprocal Tariffs which seeks to reduce the 30% tariff imposed by the US on goods exported from South Africa".

In view of these Liberation Day tariffs, AGOA then does not help local companies that much, is the view of Peter Worthington, senior economist at Absa Corporate and Investment Banking (CIB).

"Prior to the tariffs, if we take for example the motor vehicle industry, the AGOA preferences let us export vehicles at a 0% tariff whereas under most favored nation status (MFN) it would have been 2.5%. Something then, but the fact is these reciprocal tariffs have raised the overall tariff levels considerably and we're still going to be facing them. So I don't think it's actually going to be a huge advantage to us now that we have seen the extension of AGOA and inclusion of SA at least for another year."

While the AGOA extension can be seen as "a nice little symbol" that the US is willing to continue to engage, this really has all been superceded by the Trump administration's tariff policy in 2025, Worthington says.

"I hope for South Africa's situation that they'll be willing to continue to negotiate on their bilateral trade deal with us, but in and of itself this doesn't make a great deal of difference post the events of 2025."

Scroll up to the audio player to hear more of Worthington's analysis