NEW DELHI: Lesotho, a small, landlocked nation in southern Africa, is facing a mounting economic crisis after the United States imposed a steep 50% tariff on its exports — the highest levied on any country under US President Donald Trump’s new global trade measures. The decision has raised alarm in the impoverished kingdom, with fears of widespread job losses and factory closures in its crucial textile industry.
The tariff, justified by the Trump administration on the claim that Lesotho imposes a 99% duty on American goods, has triggered outrage and confusion in Maseru. “We just have to speak to the US administration because the tariff is not based on facts,” said Lesotho’s trade minister Mokhethi Shelile. Warning of the fallout, he added, “We are a small economy… we are concerned about the possible closure of textile factories.”
Around 12,000 workers — most of them women — are employed in textile factories catering primarily to US brands. Lesotho exported $237 million worth of goods to the US in 2023, while importing just $2.8 million. Yet the imbalance did not spare it from the tariff hike, which now threatens the backbone of its economy.
The measures are part of Trump’s broader trade offensive against what he has labelled “global moochers,” The New York Times reported. While most countries were subjected to 10% levies, Lesotho topped the list, followed by Madagascar (47%), Botswana (37%), Angola (32%), and South Africa (30%). Experts have criticised the rationale behind the tariff regime, calling it “idiotic” and disconnected from economic realities.
Lesotho’s economic vulnerability is stark with a GDP of just $2 billion and a per capita income under $1,000, the country lacks the fiscal resilience to absorb such a sudden shock. “This will devastate the economy,” warned Jacques Nel of Oxford Economics, noting that textile and diamond exports together account for over 10% of Lesotho’s GDP.
The timing of the move is especially damaging. The African Growth and Opportunity Act (Agoa) — a US policy that has allowed duty-free access to African exports since 2000 — is due to expire later this year. Lesotho has been a major beneficiary of the programme, with US-bound goods accounting for nearly a fifth of its economy. Trump's decision is seen as prematurely undermining Agoa’s final stretch.
Economist Jayati Ghosh told The New York Times that the impact of the tariffs is likely to extend beyond countries like Lesotho. “Even African countries not facing very high tariffs are going to be suffering,” she said.
In response, Lesotho is dispatching an urgent delegation to Washington to negotiate a rollback of the tariff. The government is also exploring the Africa Continental Free Trade Area as an alternative path to trade diversification. “We will look for new markets,” Shelile said.
For many on the ground, however, the pain is already personal. Makhotso Moeti, a factory worker in the capital Maseru, said the consequences of a shutdown would be devastating. “If the factories shut down, I won’t have many options left. I’ll be forced to return home to the very poverty I thought I had escaped,” she told The Guardian.
Textiles, diamonds and hydropower: The backbone of Lesotho’s economy
Lesotho’s economic structure rests heavily on three pillars: textile manufacturing, diamond mining, and hydropower exports. The garment sector, developed under the now-endangered Agoa framework, has enabled the country to become a reliable supplier of denim and knitwear to major US retailers like Levi’s, Wrangler, Gap, and Walmart. As of 2024, roughly 12,000 workers were employed in US-linked factories, while the broader apparel sector supports up to 30,000 jobs. The industry contributes nearly 20% to Lesotho’s GDP.
Diamonds are another key export. The Letšeng mine, operated jointly with UK-based Gem Diamonds, is renowned for producing some of the highest-value diamonds per carat in the world. Revenues from diamond exports have become a critical source of government income and foreign exchange.
Additionally, Lesotho’s unique mountainous terrain allows it to generate hydropower and export water to South Africa via the multi-billion-dollar Lesotho Highlands Water Project. The initiative not only brings in royalties but also fosters job creation and infrastructure development.
The tariff, justified by the Trump administration on the claim that Lesotho imposes a 99% duty on American goods, has triggered outrage and confusion in Maseru. “We just have to speak to the US administration because the tariff is not based on facts,” said Lesotho’s trade minister Mokhethi Shelile. Warning of the fallout, he added, “We are a small economy… we are concerned about the possible closure of textile factories.”
Around 12,000 workers — most of them women — are employed in textile factories catering primarily to US brands. Lesotho exported $237 million worth of goods to the US in 2023, while importing just $2.8 million. Yet the imbalance did not spare it from the tariff hike, which now threatens the backbone of its economy.
The measures are part of Trump’s broader trade offensive against what he has labelled “global moochers,” The New York Times reported. While most countries were subjected to 10% levies, Lesotho topped the list, followed by Madagascar (47%), Botswana (37%), Angola (32%), and South Africa (30%). Experts have criticised the rationale behind the tariff regime, calling it “idiotic” and disconnected from economic realities.
Lesotho’s economic vulnerability is stark with a GDP of just $2 billion and a per capita income under $1,000, the country lacks the fiscal resilience to absorb such a sudden shock. “This will devastate the economy,” warned Jacques Nel of Oxford Economics, noting that textile and diamond exports together account for over 10% of Lesotho’s GDP.
The timing of the move is especially damaging. The African Growth and Opportunity Act (Agoa) — a US policy that has allowed duty-free access to African exports since 2000 — is due to expire later this year. Lesotho has been a major beneficiary of the programme, with US-bound goods accounting for nearly a fifth of its economy. Trump's decision is seen as prematurely undermining Agoa’s final stretch.
Economist Jayati Ghosh told The New York Times that the impact of the tariffs is likely to extend beyond countries like Lesotho. “Even African countries not facing very high tariffs are going to be suffering,” she said.
In response, Lesotho is dispatching an urgent delegation to Washington to negotiate a rollback of the tariff. The government is also exploring the Africa Continental Free Trade Area as an alternative path to trade diversification. “We will look for new markets,” Shelile said.
For many on the ground, however, the pain is already personal. Makhotso Moeti, a factory worker in the capital Maseru, said the consequences of a shutdown would be devastating. “If the factories shut down, I won’t have many options left. I’ll be forced to return home to the very poverty I thought I had escaped,” she told The Guardian.
Textiles, diamonds and hydropower: The backbone of Lesotho’s economy
Lesotho’s economic structure rests heavily on three pillars: textile manufacturing, diamond mining, and hydropower exports. The garment sector, developed under the now-endangered Agoa framework, has enabled the country to become a reliable supplier of denim and knitwear to major US retailers like Levi’s, Wrangler, Gap, and Walmart. As of 2024, roughly 12,000 workers were employed in US-linked factories, while the broader apparel sector supports up to 30,000 jobs. The industry contributes nearly 20% to Lesotho’s GDP.
Diamonds are another key export. The Letšeng mine, operated jointly with UK-based Gem Diamonds, is renowned for producing some of the highest-value diamonds per carat in the world. Revenues from diamond exports have become a critical source of government income and foreign exchange.
Additionally, Lesotho’s unique mountainous terrain allows it to generate hydropower and export water to South Africa via the multi-billion-dollar Lesotho Highlands Water Project. The initiative not only brings in royalties but also fosters job creation and infrastructure development.
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