Lesotho’s textile sector is facing uncertainty following the announcement of a 50% import tariff on its goods exported to the United States. The country, which has benefited significantly from the African Growth and Opportunity Act (Agoa), a key trade agreement with the US, is grappling with the potential consequences of this tariff increase.
Teboho Kobeli, the founder of Afri-Expo Textiles, a company that employs 2,000 people in Lesotho, expressed concern over the impact on his business, noting that the new tariffs could make his goods less competitive in the US market. Agoa, which provides duty-free access to American consumers for certain goods from Africa, has been a cornerstone of US-Africa trade relations for over 25 years, particularly benefiting the textile sector in countries like Lesotho.
Agoa was designed to help industrialize the African continent, create jobs, and foster economic growth through trade rather than aid. While its long-term impact has been debated, the act has been credited with creating hundreds of thousands of jobs across sub-Saharan Africa, especially in textiles. However, the new tariff structure, introduced by President Donald Trump, has cast doubt on Agoa’s future.
Under the proposed tariffs, countries like Lesotho, Kenya, Ethiopia, Ghana, and South Africa could see their exports to the US taxed at rates ranging from 10% to 50%. For Lesotho, the 50% tariff could be especially damaging, with experts predicting it could significantly reduce the country’s GDP and welfare in the event of a sustained loss of US market access.
Despite these challenges, some countries, such as Kenya, are hopeful that they will remain competitive in the US market. Kenya’s Foreign Affairs Principal Secretary, Korir Sing’oei, expressed confidence that the new tariffs would not immediately apply until the law expires in 2025, unless Congress decides otherwise.
The potential dissolution of Agoa, which is up for renewal later this year, raises significant questions about the future of US-Africa trade. Agoa has allowed African nations to export a variety of goods duty-free to the US, including textiles, cocoa products, and oil, provided they adhere to certain conditions, such as market-friendly policies and respect for human rights. In 2023, US-Africa trade under Agoa amounted to $47.5 billion.
Lesotho, alongside larger economies like South Africa and Nigeria, has benefited from Agoa’s provisions, particularly in textiles, supplying major US retailers like Walmart and GAP. However, the prospect of losing Agoa privileges presents significant challenges for Lesotho’s garment sector.
Mukhisa Kituyi, former Secretary-General of the UN Conference on Trade and Development, stated that the imposition of such tariffs could severely damage Lesotho’s textile manufacturing, while also highlighting the broader implications for Africa’s trade strategy.
Michelle Gavin, Senior Fellow for Africa Policy Studies at the Council on Foreign Relations, noted that the new tariffs lack a clear economic strategy and could further diminish US influence in Africa. With China already the continent’s largest trading partner, the US risks losing ground to other global powers, she warned.
As the debate over Agoa’s future continues, African nations may need to explore alternative trade avenues, including deeper intra-African trade and diversification of trading partners, to mitigate the potential fallout from the evolving US trade policies.
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