View of the commercial cargo port in Stone Town, Zanzibar, Tanzania. ihorbondarenko/Adobe Stock

In September, US President Donald Trump signed into law a two-year extension of the African Growth and Opportunity Act (AGOA). This short-term renewal offers the Trump administration a chance to modernise a programme that has been a key force in driving duty-free African exports to the US since it was first implemented in 2000.

The challenge for President Trump is that the AGOA in 2026 is at odds with his administration’s push for tariffs. In spring 2025, Trump sought to impose ten per cent tariffs on imports from nearly every country worldwide. In February, the US Supreme Court struck these down, finding that the president lacks authority to impose tariffs without congressional approval. In July, the Trump administration introduced further tariffs under Section 301 of the US Trade Act of 1974, pointing to concerns about forced labour.

Earlier in 2026, President Trump temporarily reauthorised the AGOA after the programme was allowed to lapse in autumn 2025. ‘That extension was partly because they realised they might have scored a bit of an own goal especially vis-a-vis China – firstly, by letting AGOA expire and, secondly, imposing all these tariffs on African countries,’ says Steyn, a director at Werksmans in Johannesburg and Chairperson of LEX Africa. ‘It is the importance of African critical minerals that has focused the US government’s attention, particularly on countries like the Democratic Republic of Congo.’

Africa holds approximately 30 per cent of the world’s critical mineral resources, used to power advanced technologies in sectors such as defence, healthcare and energy. As such, the Trump administration may well prefer to pursue a long-term AGOA extension that strengthens US trade competitiveness by ensuring that African countries reciprocate the tariff reductions granted by Washington.

But while the Trump administration might argue that a short-term renewal of the AGOA buys time to negotiate the reforms needed to modernise the programme – to align it more closely with its ‘America First’ strategy – the decision to act now may also be related to China’s implementation of its own two-year tariff-free policy for 53 African nations.

China’s policy, which began in May and will last until April 2028, is aimed at encouraging economic partnerships, as well as establishing Beijing as an alternative to the US. China has excluded Eswatini from the tariff-free policy because of its diplomatic ties to Taiwan. ‘China’s policy is a great outcome for African countries and will hopefully provide some economic boosts,’ says Charles Zhan, Co-Chair of the IBA International Trade and Customs Law Committee and Head of International Trade at Moulis Legal in Canberra. The policy is being viewed as an ‘introductory offer’ that paves the way for the eventual China-Africa Common Development Economic Partnership Agreement, he says.

Emma Jean Markin, Co-Chair of the IBA African Regional Forum, believes however that China’s two-year policy window is ‘a fine timeline for clearing out warehouse inventory, but a terrible basis for building new factories or planting crops that take years to mature.’ She says that ‘no rational business owner will sink millions into infrastructure based on a promise that expires in April 2028. Industrial growth requires rock-solid clarity after the deadline alongside fast, predictable customs procedures.’

Despite its sizable reserves, Africa’s share of global mineral revenues sits at just ten per cent. African leaders are now pushing to move beyond simple resource extraction and are aiming for partnerships focused on industrialisation, job creation and value-added trade. ‘China is a very important trade partner with African countries and an important source of infrastructure and other investment,’ says Steyn. ‘But the benefit of this latest policy is that it allows African countries a huge opportunity to export more into the Chinese market and contrasts favourably with the US approach of imposing tariffs.’

While growers of Kenyan coffee or Ivorian cocoa stand to benefit from China’s policy, it’s those advanced economies with established export markets who are set to gain the most from this new trade environment. Such countries include South Africa – with its strong industrial base and financial services sector – and Morocco, which holds more than 75 per cent of global phosphate reserves.

Other less-developed African countries have been called upon to build capacity, strengthen their economies and diversify production to maximise the benefits of China’s policy. ‘African countries have to change how they play the game because selling raw beans and unshelled nuts leaves the real money on the table,’ says Markin, Managing Partner of Markin & Associates in Accra. ‘Processing, packaging and branding must happen right here at home to turn agricultural exports into local manufacturing jobs and real, lasting income.’

In addition to a reliance on raw commodity exports, many African economies still face structural constraints such as limited industrial capacity and weak logistics, says Steyn. ‘But can China’s zero-tariff policy in practice stimulate industrialisation in Africa – which would mean African businesses upscaling to take advantage of the opportunity – and can Africa manufacture goods that can attract Chinese consumers?’ he asks.

One of the biggest challenges facing the continent is its trade deficit with China. Chinese exports to Africa far exceed those heading in the opposite direction, and this gap is widening. Claudia Santos Cruz, Vice-Chair of the IBA African Regional Forum and a partner at Morais Leitão in Maputo, says removing tariffs alone doesn’t fix this structural asymmetry. ‘That imbalance directly constrains the industrial employment and tax revenue African governments need to fund public services, and it is worsened by fiscal pressures many governments already face that crowd out the very investment needed to build domestic industry,’ she says.

Steyn argues that the private sector, rather than government, is the key party when it comes to promoting trade and industrialisation in Africa. ‘African governments increasingly accept the need to harness the support and power of the private sector to try to make intra-African regional markets stronger, because that would in itself help to attract more foreign investment,’ he says.

Trading under the African Continental Free Trade Area (AfCFTA) began in 2021. The AfCFTA aims to accelerate intra-African trade and boost the continent’s position in the global marketplace. ‘The Chinese and the Americans seem to prefer government-to-government deals, as opposed to negotiating with African governments as a continental or regional bloc,’ says Steyn. ‘So, the AfCFTA is a very important development with remarkable support from 54 African countries, and one can’t divorce it from Chinese and US trade policy in Africa.’