US Tariffs Threaten Lesotho’s Textile Industry and Africa Trade Pact

Devastating Blow to Lesotho’s Economy

April 5 – Lesotho’s textile sector faces a crisis as new US tariffs impose a 50% tax on exports, potentially crippling the industry that employs thousands.

Teboho Kobeli, founder of Afri-Expo Textiles which employs 2,000 workers, described the situation as “terrible” and “devastating.” The tariff hike threatens to price Lesotho’s goods out of the competitive US market.

Agoa’s Uncertain Future

The African Growth and Opportunity Act (Agoa), a 25-year-old US trade initiative, has been instrumental in Africa’s economic development. The program provided duty-free access to US markets for qualifying African nations, helping create hundreds of thousands of jobs.

However, President Trump’s new tariffs ranging from 10% to 50% on African imports have created confusion about Agoa’s future. South Africa believes these tariffs effectively nullify Agoa benefits, while Kenya maintains the legislation remains valid until 2025.

Economic Impact Across Africa

The Clinton-era Agoa legislation has facilitated $47.5 billion in two-way trade between the US and Africa. While South Africa and Nigeria dominated this trade, smaller nations like Lesotho became significant garment exporters to major US retailers.

Experts warn the tariffs could have severe consequences:

• Lesotho faces potential 1% GDP reduction within two years
• 50% tariff could be “death knell” for Lesotho’s textile industry
• Welfare impacts predicted to be “dramatic”

Geopolitical Consequences

Analysts suggest these trade policies may accelerate the decline of US influence in Africa, potentially benefiting China which is already the continent’s largest trading partner.

Michelle Gavin of the Council on Foreign Relations criticized the tariffs as economically nonsensical, warning they represent “a withdrawal, an ignoring of an entire huge region of the world.”

Looking Ahead

Countries with lower tariff rates (10%) like Kenya may still compete in US markets by negotiating cost absorption with importers. However, the broader implications for US-Africa trade relations remain uncertain as Agoa’s renewal prospects appear dim.

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