Lesotho’s Garment Industry Faces Uncertainty Amidst US Tariff Threats

Maseru: A garment factory in Lesotho, known for producing Trump-branded golf shirts, is on the brink of closure due to substantial import taxes imposed by the US government earlier this year. The small southern African kingdom was subjected to "reciprocal" tariffs of 50%—a rate higher than any other nation—announced by US President Donald Trump in April, although these tariffs have been temporarily paused.

According to BBC, the tariffs are set to be reimposed this Friday, unless a separate deal is reached, casting uncertainty over the future of Lesotho's textile industry. This uncertainty is one reason the country declared a "state of disaster" earlier this month to expedite job creation. Ms. Seleso, an embroiderer at Precious Garments for eight years, expresses her concerns as the factory workers face reduced work hours and pay, impacting their ability to support their families.

The BBC reports that although the factory has not yet indicated plans to shut down, workers have been warned of potential closure if circumstances do not improve. This situation is exacerbated by a current 10% tax on Lesotho's exports to the US, a shift from previous duty-free access under the African Growth and Opportunity Act (Agoa), which aimed to alleviate poverty and create jobs through trade rather than aid.

The textile and garment industry, once Lesotho's largest private-sector employer, has seen job numbers fall from 50,000 at its peak to 36,000, with 12,000 jobs directly affected by the US tariffs. The high tariffs appear to have jeopardized Agoa, threatening a vital part of the country's economy. Unemployment remains a significant issue, with youth unemployment almost 50%, and youth activist Tšolo Thakeli highlights the dire job market compounded by allegations of nepotism and corruption.

Despite government assurances of efforts to mitigate the impact, the textile sector's future remains uncertain. Trade Minister Mokhethi Shelile mentions a shift towards production for South Africa, as 80% of the garment industry's output is now directed away from the US market. However, factories like TZICC have been heavily impacted, with layoffs due to halted orders and uncertainty surrounding Agoa's future.

For Ms. Seleso and other workers, government promises offer little consolation amidst the current economic challenges. The situation remains critical for Lesotho's workforce, as they await tangible solutions to the ongoing crisis.