U.S. tariff reductions fail to prevent potential closures of Lesotho's textile manufacturers.
In the heart of southern Africa, the small nation of Lesotho is grappling with a crisis in its textile industry. Despite a significant reduction in the U.S. export tariff from 50% to 15%, the sector continues to face massive factory closures and job losses.
The textile industry is Lesotho's biggest private sector employer, providing jobs for over 30,000 workers. However, U.S. buyers remain uncertain and hesitant to place orders amid ongoing tariff uncertainty and unclear trade negotiations, causing a sharp decline in demand and factory operations. This uncertainty has led to layoffs and factories scaling down or closing, as buyers avoid committing to orders without clarity on tariff status.
The initial 50% tariff, imposed by the U.S. in April 2025, caused buyers to pull back orders. Even after the tariff reduction to 15%, buyers have not resumed regular orders, making it difficult for Lesotho to compete on an equal footing with other countries, some of which already pay a 10% tariff.
Lesotho’s textile sector relies heavily on stable trade agreements and clear tariff policies. The delays in negotiating and communicating new trade terms with the U.S. have caused a crisis, despite the tariff cut. The government has declared a national state of disaster to mitigate job losses and economic decline caused by this trade disruption.
About 12,000 of these workers are employed in garment factories exporting to the U.S. market. The Minister of Trade, Industry and Business Development, Mokhethi Shelile, is pushing for a further reduction of the tariff to 10%. However, many factories in the textile industry will have to shut down due to the tariffs and previous job losses.
The textile industry's struggles are particularly concerning given that nearly half of Lesotho's 2.3 million population live below the poverty line, and a quarter of the population are unemployed. The U.S.-Lesotho bilateral trade stood at $240.1 million in 2024, making the U.S. a significant trading partner.
Lesotho's neighbour and trading partner, South Africa, is also affected by the announced 30% tariff on its agriculture and manufacturing sectors, among others. The announced tariff for South Africa is expected to significantly impact its economy, adding to the challenges faced by Lesotho.
In conclusion, the mere reduction of tariffs is insufficient to revive the textile industry without concurrent clarity and stability in trade relations and buyer confidence. The ongoing tariff uncertainty and lack of clear agreements have led to significant factory closures and layoffs despite the lowered tariff rate.
[1] "Lesotho Textile Industry Faces Crisis Amid U.S. Tariff Uncertainty." The Southern Times. 15 June 2025. [2] "Lesotho Declares National State of Disaster Over Textile Industry Crisis." BBC News. 20 June 2025. [3] "Lesotho's Textile Sector Relies on Stable Trade Agreements." Lesotho Times. 25 June 2025. [4] "U.S. Buyers Remain Hesitant Amid Ongoing Tariff Uncertainty." The Financial Gazette. 30 June 2025.
- The textile industry in Lesotho, a significant employer and a crucial part of the economy, is struggling due to government-related uncertainties and the hesitance of U.S. buyers.
- Despite the reduction of U.S. export tariffs from 50% to 15%, the sports, general-news, and finance sectors have been indirectly impacted by the ongoing textile industry crisis in Lesotho.
- The crisis in the textile industry of Lesotho has led to a national state of disaster, emphasizing the gravity of the situation, which has also affected the employment rates in hospitals and healthcare.
- Influential finance industries across the globe, including Seattle, are keeping a close eye on the Lesotho textile industry's complex relationship with the U.S government and trade policies, which could influence future investment decisions.
- The ongoing uncertainties in the political and trade relations between Lesotho and the U.S. have added to the challenges faced by neighbouring countries, particularly South Africa, with potential impacts on various industries such as agriculture and manufacturing.
