“Nobody has ever heard of” Lesotho, Donald Trump said last month with his trademark braggadocio.
That’s despite the US’ diplomatic mission in the Kingdom of Lesotho, a tiny mountainous enclave surrounded by South Africa. But the US president has since ensured that everyone has heard of Lesotho by imposing a 50% “reciprocal” levy on imports from the impoverished nation: the highest of his so-called “Liberation Day” tariffs.
The ‘denim capital of Africa’
If you’ve ever bought a pair of jeans from an American brand like Levi’s, “chances are they were manufactured at a factory” in Lesotho, said The Associated Press. The country’s annual GDP relies heavily on exports, and textile manufacturing is one of its “key industries”.
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Lesotho, an independent nation of just two million people, is known as the “denim capital of Africa”, according to the BBC – but it doesn’t just produce jeans. Last year, Lesotho exported $237 million (£184 million) worth of clothes and textiles to the US via the African Growth and Opportunity Act (Agoa): about 75% of its textile output.
The continent-wide trade agreement has allowed eligible African nations tariff-free access to the US for “thousands of product types” since 2000, said The Guardian. It has created “a thriving garment industry” in Lesotho, accounting for about 20% of GDP. Now, “all that is at risk”. Of Lesotho’s 30,000 garment workers, mostly women, 12,000 make clothes for US brands including Calvin Klein and Walmart.
“We need to urgently travel to the US to engage with its executives and plead our case,” Lesotho’s trade minister Mokhethi Shelile said on Thursday. “My biggest concern was the immediate closure of factories and job losses.”
‘Lesotho will be dead’
Trump claims Lesotho charges a 99% tariff on US goods, based on a formula the White House used to calculate trade deficits. Lesotho disputes the figure, saying it was unaware of how the US arrived at that number. Many economists have explained that the methodology is flawed, and foreign governments decried the resulting levies as unfair and misrepresentative.
But the calculation means smaller economies with limited imports from the US, such as Lesotho, were “hit hardest” by Trump’s tariffs, said Al Jazeera. That trade surplus is “largely driven by diamond and textile exports”. The measure will deliver “a severe blow” to Lesotho’s economy. The tariff “is going to kill the textile and apparel sector”, according to economic analyst Thabo Qhesi, based in the capital Maseru. “If the closure of factories were to happen, the industry is going to die and there will be multiplier effects,” he told Reuters. “So Lesotho will be dead, so to say.”
But the tariff also “compounded the pain” of one of Trump’s previous moves, said Al Jazeera: cuts to US foreign aid. Lesotho has one of the highest HIV/Aids infection rates in the world, with roughly one in four adults living with the virus, according to government data. Lesotho’s health sector was “reliant” on US aid.
Since 2016, Lesotho has received more than $850 million in HIV funding, said Agence France-Presse, via a Bush-era programme called the President’s Emergency Plan for Aids Relief. After a “complete halt” to foreign aid in February, only 28% of that support had resumed in Lesotho by mid-March, according to the UN Aids agency. Many HIV patients in Lesotho have been “cut off from vital medication”.
