Lesotho's textile factories face closures despite US tariff cut

Key Points

• Lesotho's textile industry faces massive factory closures despite a reduction of U.S. export tariffs from 50% to 15%, as the sector remains at a competitive disadvantage.
• Approximately 30,000 workers are employed in Lesotho's textile sector, which is heavily reliant on exports to the U.S., including major retailers like Levi's and Walmart.
• Lesotho's Minister of Trade, Mokhethi Shelile, is advocating for further negotiations to reduce the tariff to a minimum of 10% to help the textile industry compete effectively.
• The anticipated tariff increase earlier this year has already led to significant layoffs within the industry, with manufacturers like Tzicc closing operations and sending home most of their workers.

MASERU, Lesotho (AP) — The southern African nation of Lesotho has had its U.S. export tariff reduced from a threatened 50% to 15% but its crucial textile industry still faces massive factory closures, officials said on Friday.

Despite a reduction announced by U.S. President Donald Trump, the country's textile sector says it remains at a competitive disadvantage and faces ongoing factory closures and job losses.

In April, the Trump administration announced a 50% tariff on imports from Lesotho, the highest among all countries.

The tariffs were paused across the board but the anticipated increase wreaked havoc across the country's textile industry, which is its biggest private sector employer with over 30,000 workers.

About 12,000 of these workers work for garment factories exporting to the U.S. market, supplying American retailers like Levi's and Wrangler.

The Associated Press reported this week that clothing manufacturer Tzicc has seen business dry up ahead of the expected tariff increase, sending home most of its 1,300 workers who have made and exported sportswear to American stores, including JCPenney, Walmart and Costco.

David Chen, chairperson of the Lesotho Textile Exporters, has warned that the U.S. government’s move to reduce the tariffs offer little relief for the struggling industry as their competitors have lesser tariffs.

“Other countries which we are competing against are already being charged 10 percent, which makes it difficult for us to compete on an equal footing," said Chen, singling out the east African country of Kenya as its strongest competitor with a more favorable 10% tariff.

“As a result, many factories will have to shut down,” said Chen. “They had already been forced to lay off workers when the tariffs were first announced in April.”

According to the Office of the U.S. Trade Representative, in 2024, U.S.-Lesotho bilateral trade stood at $240.1 million. Apart from clothing, Lesotho’s exports also include diamonds and other goods.

Classified as a lower-middle income country by the World Bank, nearly half of Lesotho’s 2.3 million population live below the poverty line, while a quarter are unemployed.

Lesotho's Minister of Trade, Industry and Business Development, Mokhethi Shelile, said that while several meetings with U.S. trade representatives led to a reduced tariff, more needed to be done to lower it further.

“We remain committed to pushing for a further reduction to the minimum tariff level of 10 percent, which is essential for our textile sector to compete effectively in the US market," he said. “I have already communicated with the U.S. Embassy regarding continued negotiations.”

Lesotho's neighbor and trading partner, South Africa, is also reeling after Trump announced a reciprocal 30% tariff for the country which is expected to significantly impact its agriculture and manufacturing sectors, among others.

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AP’s Africa coverage at: https://apnews.com/hub/africa