U.S. tariff on Lesotho jeans exports decreases significantly, now at 15% instead of 50% - Reduced U.S. Duties on Lesotho Jeans Exports: Duty Reduction from 50% to 15% Eases Export Burden for Lesotho
In a significant development, the US has lowered the tariff on Lesotho's jeans exports from a hefty 50% to 15%. This reduction, announced by Finance Minister Retselisitsoe Matlanyane, comes as a welcome respite for the Southern African nation, which has been grappling with the economic fallout of the previous tariffs since their imposition in April 2025.
The tariffs, imposed by the Trump administration, have taken a heavy toll on Lesotho's garment industry, including major denim exporters producing for brands like Levi's and Wrangler. The result has been factory closures, job losses, and economic hardship for a country heavily reliant on this export sector.
Lesotho, with a GDP of over two billion dollars (1.7 billion euros), had previously benefited from tariff-free access to the US market under the US Growth and Opportunity Act for Africa (AGOA), enabling the garment sector to thrive and support thousands of jobs. However, the new 50% tariff sharply reversed these gains, making Lesotho's exports uncompetitive compared to other international suppliers.
The reduction in tariff, while a step in the right direction, does not completely alleviate the challenges facing Lesotho's textile industry. The majority of Lesotho's textile exports are still sent to the US, and competition with countries taxed at 10% will remain a hurdle. The head of the textile union, Malebohang Thai, stated that with the 15% tariff, Lesotho will still face "serious problems."
Finance Minister Matlanyane, however, expressed hope for understanding in Washington, stating that the US has a moral responsibility to accommodate smaller economies. He described the reduction in tariff as putting Lesotho "on par with other countries," and a "sigh of relief" for the government.
The reduction in tariff ends a trade conflict initiated by former US President Donald Trump. Lesotho's textile factories, which employed around 12,000 workers, have faced closures and suspended production in response to the tariffs, threatening livelihoods and economic stability in the country. The trade minister of Lesotho described the situation as a "state of disaster," forcing the government to seek alternative job creation measures beyond textiles.
Youth unemployment in Lesotho stands at a staggering 38%, making the economic disruption caused by the tariffs even more concerning. The government is grateful for the 15% tariff reduction but is also negotiating with the US to extend the AGOA program to further support the country's textile industry.
In a positive light, the reduction in tariff is seen as giving Lesotho "a chance in the competition." The Finance Minister expressed optimism, stating that the reduction will help Lesotho regain its competitive edge in the global market. Despite the challenges ahead, the reduction in tariff offers a glimmer of hope for Lesotho's struggling garment industry.
References:
- Bloomberg
- Reuters
- The Citizen
- The Finance Minister's announcement of a reduced tariff on Lesotho's jeans exports is a significant step towards alleviating the economic hardship faced by the nation, as the cooperative effort between the US and Lesotho's government could potentially revitalize the struggling garment industry.
- In the realm of business, Lesotho's economy might regain a competitive edge in the global market, given the reduction in tariffs, yet the continued competition with countries taxed at 10% and the ongoing negotiations for AGOA extension could define the trajectory of the nation's textile industry.
