Lesotho's textile industry struggles amid tariff reductions

Lesotho, a southern African nation, has been grappling with significant challenges in its textile sector despite a reduction in U.S. export tariffs. In April 2024, U.S. President Donald Trump announced a staggering 50% tariff on textiles imported from Lesotho, the highest rate among all countries. Although this was later reduced to 15%, the sector still finds itself at a severe competitive disadvantage, particularly against rivals in countries like Kenya, which enjoys a more favorable 10% tariff rate. This situation has had devastating implications for Lesotho’s garment factories, which serve as a vital part of the economy. Before these tariff changes, Lesotho's textile industry employed over 30,000 workers, making it the largest private sector employer in the country. The anticipation of the steep tariff led to uncertainty and a significant downturn in business activities, as many companies struggled to maintain operations amidst fears of increased costs and reduced orders. Clothing manufacturer Tzicc epitomizes this predicament, as it was forced to send home most of its 1,300 workers due to dwindling business opportunities stemming from the tariff announcement. The impact of tariffs extends beyond immediate job losses, affecting the livelihoods of many families in a country where nearly half of the population lives below the poverty line. This has fostered a challenging environment, especially as Lesotho's textile sector was banking on its exports to the U.S. market, catering to prominent American retailers like Levi's and Wrangler. The chairperson of the Lesotho Textile Exporters, David Chen, has articulated the industry's dire situation and the necessity for further reductions in tariffs to compete effectively. Lesotho's Minister of Trade, Industry, and Business Development, Mokhethi Shelile, has acknowledged recent dialogues with U.S. trade representatives, indicating the government's commitment to advocating for a more favorable minimum tariff level of 10%. He argues that this reduction is essential for the textile sector's survival, emphasizing the need for sustained negotiations to alleviate the pressures faced by the industry. The repercussions of these ongoing trade negotiations resonate throughout Lesotho as its economy seeks stability amid growing external challenges, such as reciprocal tariffs imposed on neighboring South Africa, complicating trade relations and economic prospects in the region.