Trump's highest tariff will kill tiny African kingdom of Lesotho, economist says

[milestogo]

A 50% reciprocal trade tariff on Lesotho, the highest levy on U.S. President Donald Trump's long list of target economies, will kill the tiny Southern African kingdom that Trump ridiculed last month, an economic analyst there said on Thursday.

Lesotho, which Trump described in March as a country "nobody has ever heard of", is one of the world's poorest nations with a gross domestic product of just over $2 billion. It has a large trade surplus with the United States, mostly made up of diamonds and textiles, including Levi's jeans. Its exports to the United States, which in 2024 totalled $237 million, account for more than 10% of its GDP.

Trump on Wednesday imposed sweeping new tariffs on global trading partners, upending decades of rules-based trade and threatening cost increases for consumers. He said the "reciprocal" tariffs were a response to duties and other non-tariff barriers put on U.S. goods. Lesotho charges 99% tariffs on American goods, according to the U.S. administration. In Africa, the move signalled the end of the AGOA (African Growth and Opportunity Act) trade deal that was supposed to help African economies develop through preferential access to U.S. markets, trade experts said.

It also compounded the pain after Trump dismantled USAID, the government agency that was a major supplier of aid to the continent. "The 50% reciprocal tariff introduced by the U.S. government is going to kill the textile and apparel sector in Lesotho," Thabo Qhesi, a Maseru-based independent economic analyst, told Reuters. Oxford Economics said the textile sector, with some 40,000 workers, was Lesotho's biggest private employer and accounted for roughly 90% of manufacturing employment and exports.

"Then you are having retailers who are selling food. And then you have residential property owners who are renting houses for the workers. So this means if the closure of factories were to happen, the industry is going to die and there will be multiplier effects," Qhesi said. "So Lesotho will be dead, so to say."

https://www.businessghana.com/site/news/politics/325711/Trump%27s-highest-tariff-will-kill-Lesotho

[msongs]

1. 99 per cent tariffs on US goods seems a tad extreme nt

[milestogo]

2. Does it stop us from buying denim clothing?

[slightlv]

3. How about not exporting any diamonds to the U.S.

That's one that will hit the rich, for sure!