Agoa has cleared another hurdle, but that is not necessarily good news for South Africa, as it is still unsure if the country will be included, considering the volatile relationship between South Africa and the United States (US).
The African Growth and Opportunity Act (Agoa) was passed on Tuesday by an overwhelming majority in the US House of Representatives. However, Brendon Verster, senior economist at Oxford Economics Africa, says that although it marks a step in the right direction, they think the bill in its current form will face resistance from hardline Republicans in the Senate.
“Ultimately, President Donald Trump has the power to sign the bill into law, meaning that Trump will want to ensure that the bill speaks to his ‘America First’ agenda if it stands a chance to become law.”
The US House of Representatives approved a three-year extension of Agoa with 340 voting in favour and 54 against after the US House Committee on Ways and Means’ approval of a three-year extension in mid-December.
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Agoa’s path from here to Trump’s desk
Although the bill aims to extend Agoa until 31 December 2028, it must still be approved by the Senate, where it can be passed, amended, or rejected, Verster says.
“If the House and Senate versions differ, a conference committee is formed to resolve the differences, and both chambers must approve the final text. Only then does the bill go to the president, who can sign it into law or veto it.”
The bill will specifically extend the duty-free treatment of products from beneficiary countries in sub-Saharan Africa under the Trade Act and Agoa, with 32 countries currently eligible.
The extended period applies to the duty-free treatment of specific apparel articles from beneficiary countries and to the third-country fabric provision, which allows limited quantities of apparel articles from less-developed countries to qualify for duty-free treatment, even if yarns and fabrics in the apparel items are imported from non-Agoa nations.
In addition, Agoa provides for the refund of duties on articles from eligible nations that entered the US after 30 September 2025 and before the bill’s enactment.
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Agoa expected to face most significant hurdles in Senate
Verster says while the latest approval by the House marks progress following the Ways and Means Committee vote last year, Agoa still has a long way to go. “We think Agoa will face its most significant hurdles in the Senate and, ultimately, when it arrives on Trump’s desk.”
He explains that there are two competing Agoa-related bills. “The version passed today merely seeks to extend Agoa for eligible countries, keeping the programme essentially unchanged, and it does not explicitly target the exclusion of certain countries, such as South Africa.
“The other, introduced by Senator John Kennedy, seeks to extend Agoa for two years and includes more punitive conditions, such as a formal review of US-South Africa relations, with criteria tied to governance and geopolitical alignment.
“Pretoria will continue diplomatic efforts while the extension process proceeds to secure continued inclusion, given Agoa’s benefits, but we think progress will be limited under the current US administration.”
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Geopolitics puts SA in sensitive position with Agoa
Dr Ernst van Biljon, head lecturer for supply chain management at the IMM Graduate School, says the possible extension of Agoa comes at a time of extraordinary geopolitical strain, where traditional allies are openly divided, global trade is weaponised, and countries are forced to choose sides.
“The US’ increasingly protectionist posture, combined with its growing strategic rivalry with China, Russia, South America and Iran, places South Africa in a particularly sensitive position given its Brics membership and diplomatic relationships with these nations.
“For South Africa, Agoa has long represented preferential access to the US market, but its uncertain future now exposes deeper strategic questions about trade dependency, competitiveness and supply chain agility.
“Agoa is therefore no longer merely a trade preference but has become entangled in a broader geopolitical contest over influence, loyalty and economic alignment, making its future far more uncertain and politically charged than at any point in its history.”
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Agoa expiry in September caused uncertainty for export-oriented industries
Van Biljon points out that Agoa’s expiry in September injected uncertainty into export-oriented industries, particularly automotive manufacturing and agriculture. “While there appears to be growing momentum in the US Congress to extend the agreement, the outcome and conditions remain unclear.
“This uncertainty reflects a broader shift in US trade policy toward reshoring, reciprocal trade agreements and a more transactional approach to market access.”
From a supply chain management perspective, Van Biljon says the implications are immediate and material. “Preferential trade agreements are not merely diplomatic instruments but underpin long-term sourcing strategies, capital investment decisions and network design.
“The absence of clarity around Agoa is presently disrupting cost structures, raising landed prices through the reintroduction of tariffs and weakening the predictability that global buyers require before committing to African suppliers.”
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Agoa uncertainty complicates issues for exporters
He points out that for South African exporters, Agoa’s current uncertainty complicates inventory planning, contract pricing and logistics optimisation. US-based importers, facing tariff volatility, may seek alternative sourcing locations, undermining years of supplier development and industrial capacity building.
“In this environment, supply chains gravitate toward certainty, even if that certainty comes at a higher nominal cost elsewhere.”
What can South Africa do then? Van Biljon says strategically, Agoa’s fragility reinforces the need for South Africa to accelerate trade diversification. “Deepening integration within the African Continental Free Trade Area (AfCFTA), strengthening Brics trade linkages and expanding South–South supply chain partnerships are no longer optional but risk mitigation imperatives.
“A resilient trade strategy must be built on multiple market access pathways rather than reliance on a single preferential regime.”
He says Europe is also reshaping its own trade priorities as it grows more distant from the US. “For South African exporters, this means the European Union, already one of the world’s largest integrated consumer markets, may become an even more important destination for agricultural, manufactured and processed goods.”
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Agoa not expected to return in its original form
Looking ahead, Van Biljon says even if Agoa is extended, it is unlikely to return in its original, long-term form. “Supply chain leaders should plan for a future characterised by shorter trade horizons, greater compliance scrutiny and conditional market access. This reality demands flexible sourcing strategies, scenario-based tariff planning and investment in data-driven supply chain visibility.
“Ultimately, Agoa should be seen not as a guarantee, but as a temporary enabler within a rapidly changing global trade system. South Africa’s long-term success will not be determined by preferential access alone, but by its ability to offer reliable infrastructure, regulatory certainty and integrated regional value chains.
“In an era of fractured globalisation, supply chain resilience rather than trade preference is the true competitive advantage.”
