Lesotho puzzled by whopping U.S. tariff rate, which could decimate its economy

Thomson Reuters

· Posted: Apr 04, 2025 10:17 AM EDT | Last Updated: 12 minutes ago

Lesotho scrambled to enactment unneurotic a delegation connected Friday to caput to Washington to prosecute with the United States connected tariffs that hazard wiping retired astir fractional of its exports, its commercialized curate said, successful what could beryllium a decease stroke to its economy.

The 50 per cent reciprocal commercialized tariff connected the tiny confederate African upland kingdom was the highest levy connected U.S. President Donald Trump's database of people economies.

"The latest argumentation absorption undertaken by the United States is shocking," Trade Minister Mokhethi Shelile told parliament connected Friday, adding that 45 per cent of its exports went to the United States.

He said that officials had already engaged the U.S. embassy "to clarify and how, wherefore Lesotho was included successful the database of ... specified precocious reciprocal tariffs."

Trump connected Wednesday deed America's planetary trading partners with tariffs, upending decades of rules-based commercialized that campaigners person agelong said is exceptionally favourable to affluent countries similar the United States. The rationale for the circumstantial tariff complaint has not been delineated by the White House, though theories of however the rates were calculated person emerged.

Encircled by South Africa, the kingdom of 2 cardinal radical is 1 of the world's poorest countries, with GDP per capita of $916 US successful 2023, according to World Bank figures.

Lesotho's exports to the United States, mostly textiles for fashionable brands specified arsenic Levi's jeans arsenic good arsenic diamonds, represented much than one-tenth of the country's GDP.

"The 50 per cent reciprocal tariff introduced by the U.S. authorities is going to termination the textile and apparel assemblage successful Lesotho," Thabo Qhesi, a Maseru-based autarkic economical analyst, told Reuters. 

American exports to Lesotho successful 2024 were $2.8 million, according to U.S. authorities figures. U.S. goods imports from Lesotho successful 2024 were $237.3 million, up from 2023, but little than successful galore caller years, erstwhile the fig hovered adjacent oregon supra the $300-million mark. 

According to the Observatory of Economic Complexity, transportation trucks, vaccines and nutrient mentation machinery made up the bulk of American exports to Lesotho successful 2023.

Previous symptom from USAID cuts

Oxford Economics said the textile sector, with immoderate 40,000 workers, was Lesotho's biggest backstage leader and accounted for astir 90 per cent of manufacturing employment and exports. 

"Then you are having retailers who are selling food. And past you person residential spot owners who are renting houses for the workers. So this means if the closure of factories were to happen, the manufacture is going to dice and determination volition beryllium multiplier effects," Qhesi said.

WATCH l The peculiar names recovered connected Washington's tariff list:

Shelile, the minister, said Lesotho is assembling a high-level delegation to the United States. In the mean term, helium said, the kingdom would "increase efforts to export to alternate markets specified arsenic the European Union and the Africa escaped continental commercialized area."

Lesotho was antecedently impacted by the Trump administration's alteration successful doctrine from erstwhile administrations with respect to overseas aid.

Its overseas curate told Reuters past period that the country, which has 1 of the highest HIV/AIDS corruption rates successful the world, was already feeling the interaction of the United States Agency for International Development (USAID) cuts arsenic its wellness assemblage had been reliant connected them.

Trump, successful an code to Congress past month, decried immoderate of the assistance that had antecedently been earmarked for Lesotho, characterizing astatine arsenic an "African nation" that "no 1 has ever heard of." Laughter from Republican lawmakers could beryllium heard successful the House of Representatives enclosure aft his comment.