{"id":1090,"date":"2025-04-05T22:51:40","date_gmt":"2025-04-05T22:51:40","guid":{"rendered":"https:\/\/www.insuracarelife.com\/blog\/lesotho-a-small-african-nation-expects-a-big-hit-from-trumps-tariffs\/"},"modified":"2025-04-05T22:51:40","modified_gmt":"2025-04-05T22:51:40","slug":"lesotho-a-small-african-nation-expects-a-big-hit-from-trumps-tariffs","status":"publish","type":"post","link":"https:\/\/www.insuracarelife.com\/blog\/lesotho-a-small-african-nation-expects-a-big-hit-from-trumps-tariffs\/","title":{"rendered":"Lesotho, a Small African Nation, Expects a Big Hit From Trump\u2019s Tariffs"},"content":{"rendered":"<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">The nation that the Trump administration slapped with the heftiest tariff this week is a small, rural, landlocked country in southern Africa that is among the world\u2019s poorest.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Lesotho, which makes denim that goes into American-branded jeans, was hit with a 50 percent tariff. It was among several lower-income countries on the continent that were shocked by levies high above the minimum 10 percent imposed on nearly all of America\u2019s trading partners. Madagascar, where three-quarters of the population lives in poverty, now will be met with a 47 percent tariff when its apparel, vanilla and other exports enter the United States.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Products from Algeria, Angola, Botswana, Libya and Mauritius all now have tariffs above 30 percent, as does South Africa, which has come under particular attack by the Trump administration.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Mr. Trump has justified the across-the-board tariffs by declaring that the world trading system has played the United States for a chump who picked up the tab for the world\u2019s moochers.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-1\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">But Lesotho is hardly a big player in global trade: It imported less than <a class=\"css-yywogo\" href=\"https:\/\/ustr.gov\/countries-regions\/africa\/southern-africa\/lesotho#:~:text=Lesotho%20Trade%20Summary,(%2410.6%20million)%20from%202023.\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">$3 million in goods<\/a> from the United States and exported $240 million there last year.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The tariffs come as much of the African continent is already reeling. Just weeks ago, the Trump administration ended billions of dollars in aid to Africa that undergirded many countries\u2019 health care systems and disaster relief efforts.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">At the same time, governments across the continent are coping with a foreign debt load that exceeds $1.1 trillion. Many are spending more on repaying their loans than on health care or education.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">For the most part, manufactured exports from Africa to the United States are minuscule. But to countries like Lesotho, the impact of tariffs is enormous. Exports of denim and diamonds make up more than a tenth of the country\u2019s gross domestic product.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-3\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">This will \u201cdevastate the economy,\u201d said Jacques Nel, head of Africa Macro at Oxford Economics, a research firm. <a class=\"css-yywogo\" href=\"https:\/\/ustr.gov\/countries-regions\/africa\/southern-africa\/lesotho#:~:text=Lesotho%20Trade%20Summary,(%2410.6%20million)%20from%202023.\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">Lesotho<\/a> is already a poor country. It has a population of two million and its entire national output is about $2 billion a year, with an annual per capita income of $975.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThis has nothing to do with actual tariffs,\u201d Mr. Nel said. \u201cThey can\u2019t import a lot from the U.S., because they don\u2019t have a lot of money.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The textile industry is Lesotho\u2019s biggest private employer and produces its number-one export. The sector was nurtured after the United States <a class=\"css-yywogo\" href=\"https:\/\/www.bbc.com\/news\/world-africa-67284812\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">passed the African Growth and Opportunity Act<\/a> in 2000. Designed to boost manufacturing across the continent, the law removed most duties on goods from sub-Saharan Africa. That law expires later this year, although Mr. Trump effectively ended it this week.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Lesotho\u2019s factories have made garments \u2014 particularly denim \u2014 for manufacturers like Levi\u2019s and Wrangler. And although Mr. Trump recently called Lesotho a country that \u201cnobody has ever heard of,\u201d his own <a class=\"css-yywogo\" href=\"https:\/\/www.timeslive.co.za\/lifestyle\/2025-03-06-does-trump-really-not-know-about-lesotho-this-shirt-might-prove-otherwise\/\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">Trump-branded Greg Norman golf shirts<\/a> feature labels that say \u201cMade in Lesotho.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-4\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Lesotho\u2019s trade minister, Mokhethi Shelile, said the country has 11 factories that employ 12,000 workers. Seventy percent of what they produce is exported to the United States. \u201cWe are a small economy,\u201d Mr. Shelile said. \u201cWe just have to speak to the U.S. administration because the tariff is not based on facts.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-5\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Other top exporters of textiles in Africa, like Madagascar (47 percent tariff) and Kenya (10 percent), will also feel the sting.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Because South Africa does more trade with the United States, exporting automobiles, agricultural goods and more, it will be most affected, said Thea Fourie at S&amp;P Global Market Intelligence.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">African nations whose major exports are energy or certain critical minerals will be spared because the administration has exempted those items from tariffs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">While the United States is imposing tariffs on the relatively small amount of goods from Africa \u2014 just $39 billion worth last year \u2014 <a class=\"css-yywogo\" href=\"https:\/\/www.cfr.org\/article\/china-africa-december-2024\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">China<\/a> has been trying to encourage trade. It eliminated all import duties on products from 33 African countries in December.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-6\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">A bigger concern is the knock-on effects that the tariffs are expected to have on the global economy. The outlook has dimmed over the past week and analysts are expecting slower growth.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cEven African countries not facing very high tariffs are going to be suffering,\u201d said Jayati Ghosh, an economist at the University of Massachusetts at Amherst.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">As is the case with any global downturn, the poorest countries will feel the sharpest effects. Worsening economic prospects could slow trade with other partners like China and Europe. It also discourages investors.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-7\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">If inflation prompts central banks to raise interest rates, African countries with large debt burdens are in for a double whammy. Their loan payments \u2014 most of which are priced in dollars \u2014 will increase at the same time that their ability to earn foreign exchange through exports is crippled.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-8\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Mavis Owusu-Gyamfi, the president and chief executive of the African Center for Economic Transformation, said the only way forward is to develop regional trade networks within the continent, a long-running goal.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The continent has to look for \u201copportunities to build intra-African trade,\u201d she said.<\/p>\n<p class=\"css-798hid etfikam0\">Zimasa Matiwane contributed reporting from Lesotho.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The nation that the Trump administration slapped with the heftiest tariff this week is a small, rural, landlocked country in southern Africa that is among the world\u2019s poorest. Lesotho, which makes denim that goes into American-branded jeans, was hit with a 50 percent tariff. It was among several lower-income countries on the continent that were [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1091,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[775,778,777,779,774,776,386,199,197],"class_list":["post-1090","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-african","tag-big","tag-expects","tag-hit","tag-lesotho","tag-nation","tag-small","tag-tariffs","tag-trumps"],"_links":{"self":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/1090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/comments?post=1090"}],"version-history":[{"count":0,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/1090\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media\/1091"}],"wp:attachment":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media?parent=1090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/categories?post=1090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/tags?post=1090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}