Lesotho's textile industry is celebrating a significant victory as the U.S. has granted the country duty-free access to its market. This comes after a period of intense uncertainty and hardship, where the initial threat of a 50% reciprocal tariff by the Trump administration in April caused many U.S. importers to cancel orders, leading to mass layoffs and anticipated factory closures in the small African nation. While the tariff was later modified to 15% in July, this rate still put Lesotho at a competitive disadvantage compared to other textile-exporting countries like Kenya, which faced only a 10% tariff.
The original 50% tariff threat had a devastating impact on Lesotho's economy, where the textile sector is the largest private employer, supporting over 30,000 workers. Companies like Tzicc, which manufactured sportswear for American retailers such as JCPenney, Walmart, and Costco, sent home most of its 1,300 workers. According to the Office of the U.S. Trade Representative, U.S.-Lesotho bilateral trade stood at $240.1 million in 2024. The duty-free access is expected to revitalize this crucial sector, providing much-needed relief and a chance for recovery for the economy, where nearly half of the 2.3 million population lives below the poverty line.
This policy reversal effectively restores the benefits Lesotho enjoyed under the African Growth and Opportunity Act (AGOA), a 25-year-old American trade program that allowed duty-free access for many African countries. The previous tariffs had been seen as sidestepping AGOA, which was due to expire. Lesotho's Trade Minister Mokhethi Shelile had actively pushed for further reductions, communicating with the U.S. Embassy and assembling a high-level delegation to negotiate. Neighboring South Africa, which also faced a 30% reciprocal tariff from the U.S., is still dealing with its own significant trade challenges. The shift to duty-free status is a major win for Lesotho, allowing its textile industry to compete effectively again in the U.S. market.
