US Congress: AGOA Extension 2028 Passed, New Forced Labor Tariffs

• The US Congress has approved an extension of the African Growth and Opportunity Act (AGOA) until the end of 2028.
• The Agoa Extension Act received bipartisan support in both the House and Senate, and has since been signed into law by President Trump.
• New provisions allow for industry-specific tariffs and additional levies on countries failing to prevent forced labor in their supply chains.
• The program, first enacted in 2000, facilitated approximately $50 billion in goods exchange between the US and sub-Saharan Africa in 2022.
• Over 30 African nations participate in the US trade preferences Africa program, which aims to enhance trade and investment relations.

The legislative action provides greater predictability for eligible sub-Saharan African countries and businesses engaged in trade with the United States, simultaneously fostering additional avenues to strengthen and broaden commercial and investment relationships.

The United States Congress has moved to prolong a significant trade preference initiative with African nations, securing an AGOA extension 2028. This legislative action, known as the Agoa Extension Act, garnered substantial bipartisan support within the House of Representatives, passing with a vote of 370 to 48 on Tuesday. This House approval follows a similar vote in the Senate earlier in August, indicating broad consensus on continuing the US Africa trade program 2028.

The final procedural step for the measure to become law, President Donald Trump’s signature, has been completed. The African Growth and Opportunity Act (AGOA), which forms the bedrock of this trade relationship, was originally established in the year 2000, making this extension a continuation of a long-standing economic partnership.

Despite the anticipated extension, African countries participating in the program will encounter new trade conditions. These include the potential imposition of industry-specific tariffs on certain goods. More critically, the Agoa Extension Act introduces provisions for additional levies against nations found to be deficient in preventing forced labor within their supply chains, particularly where such practices are deemed detrimental to American workers.

These forced labor tariffs AGOA are framed as part of President Trump’s broader strategy to re-establish a protective tariff framework, following a Supreme Court decision that invalidated his previous sweeping import duties. This development underscores a heightened focus on ethical sourcing and labor practices, requiring businesses operating under US trade preferences Africa to meticulously scrutinize their supply chains to avoid punitive measures.

The legislative action provides greater predictability for eligible sub-Saharan African countries and businesses engaged in trade with the United States, simultaneously fostering additional avenues to strengthen and broaden commercial and investment relationships. This sentiment was articulated by Mauritius’ Ministry of Foreign Affairs, Regional Integration and International Trade in a statement released on Wednesday, highlighting the positive implications of the AGOA extension 2028.

The economic significance of the program is substantial. According to an analysis conducted by the US Trade Representative’s office, the United States and sub-Saharan African nations collectively exchanged approximately $50 billion in goods during 2022. The US Africa trade program 2028 currently encompasses more than 30 African countries, though it excludes those that either fail to adhere to US terms of agreement or have advanced beyond eligibility due to their economic growth.

Lawyers advising African exporters or US importers should note the extended predictability for trade with the US until 2028, but must also scrutinize supply chains for forced labor risks to avoid new tariffs under the Agoa Extension Act. This impacts trade compliance and risk assessment for businesses operating under the program.

Source: Reporting based on recent legislative developments.