For this reason, Lesotho now finds itself at the center of one of the largest trade controversies today. So far, the White House’s response has been to impose its highest tariff rates on the nation. Trump’s tariffs on these products, announced by US President Donald Trump in March of 2018, represent a dramatic turnaround in American trade policy. Countries like Lesotho, which have long benefitted from preferential trade agreements, will be affected.
The newly released tariff list includes Lesotho and a handful of other remarkable countries. These notably joint initiatives, with China, Japan, and the European Union. South Africa’s border with Lesotho is the world’s longest border between two countries inside one of those countries. The Trump administration even condemned it as one of the “Worst Offenders.” This changed trade environment comes just as Trump declared a freeze on aid—in his first day in office, January 20, 2017. This freeze was an action of a broader movement to review U.S. government spending and reduce the burgeoning trade deficit our country was developing.
Lesotho’s economy has largely relied on its garment factories, which produce jeans for iconic American brands like Levi’s and Wrangler. AGOA provided a way for Lesotho to raise textile and apparel exports to the U.S. This breakthrough has further cemented Lesotho’s status as the leader of the GARMENT industry. For these trade- and climate-minded entrepreneurs, the imposition of tariffs risks eroding these hard-won advances.
To Trump, the real justification for such reciprocal tariffs is simple – they’re meant “for countries that treat us badly.” He’s made clear that he is troubled by what he sees as bad fiscal deals with countries like South Africa. “Our taxpayers have been ripped off for more than 50 years, but it is not going to happen any more,” he remarked during a press conference.
Beginning April 5, the tariffs will amount to a 10 percent tax. Increased rates will apply for certain countries starting on April 9. South Africa will now incur a 30% tariff as a result of this new policy. This has sparked international outcry over the expected economic impacts on both countries.
Mokhethi Shelile, Trade Minister of Lesotho, said that the risks are serious when it comes to the aftermath of these tariffs. “My biggest concern was the immediate closure of factories and job losses,” he stated, highlighting the urgency of addressing the situation before it escalates further.
The South African presidency further rebuked the tariffs, calling them “punitive” in nature. They argued for the negative impact of such tariffs on trade relations and impairments to economic growth. They warned that these new tariffs could “serve as a barrier to trade and shared prosperity,” which could hinder collaboration between these nations.
These tariffs hurt not only Lesotho and South Africa. The U.S. has been running a persistent trade deficit. In the wake of these upheavals, officials are now taking a second look at their trade policies with a number of countries. Currently escalating tariff tensions illustrate the complex, symbiotic nature of global trade. Countries are ruthlessly guarding their own self-interests though juggling complicated webs of international diplomacy.
Lesotho’s textile industry has sorely benefited under AGOA, enabling it to benefit from duty-free access to American markets. The recent changes might radically change this picture. The potential for factory closures and job losses looms large in the minds of many Lesotho citizens who rely on these jobs for their livelihoods.