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Trumps Tariffs Are An Unfolding Economic Disaster - A Look At Lesotho in Africa

14th July 2025

The latest tariff threat from former President Trump—specifically a proposed 50% duty on Lesotho's textile exports—has already had a devastating impact. According to multiple reports, up to 40,000 jobs in Lesotho's textile industry are at risk.

Here's what's happening:

Textile Industry Fallout
Lesotho is one of Africa's top garment exporters to the US, supplying brands like Levi's and Wrangler.

The textile sector contributes 10% to Lesotho's GDP and was the largest private employer, with around 40,000 workers before the tariff announcement.

Since the threat, mass layoffs have begun, and many factories are only fulfilling existing orders with no new US contracts being placed.

State of Disaster Declared
The Lesotho government has declared a two-year national state of disaster to respond to the economic crisis.

Youth unemployment is nearing 50%, and the overall jobless rate is around 30%.

Officials are reallocating budgets and launching emergency job creation programmes to offset the damage.

Economic Ripple Effects
The uncertainty around the African Growth and Opportunity Act (AGOA)—which gave Lesotho duty-free access to US markets—is compounding the crisis.

If AGOA isn't renewed by September, the country could lose even more jobs and trade revenue.

It's a stark reminder of how global trade decisions can deeply affect local economies.

With a population of only 2.5 million the Trump tariffs are an economic disaster. The question is why hit a tiny population with one of the higher tariffs.

What will the affects be on Americans by putting tariffs on Lesotho and other poor countries.

Putting tariffs on clothing imports—like the ones recently proposed—can ripple through the U.S. economy in ways that hit everyday Americans pretty directly. Here's how:

Higher Prices at the Checkout
Apparel prices could jump by 18-39% depending on the item.

Budget fashion from countries like Bangladesh and Cambodia may become less affordable, especially for low- and middle-income families.

Yale's Budget Lab estimates the average household could pay $2,400 more per year due to tariff-related price hikes.

Reduced Consumer Spending
A recent poll found 80% of Americans are worried about how tariffs will affect their personal finances.

Many plan to cut back on clothing, entertainment, and tech purchases, which could slow retail sales.

Discount stores like Dollar General and Walmart are seeing more traffic as shoppers hunt for deals.

Impact on U.S. Fashion Industry
U.S. fashion brands face higher sourcing costs, which may shrink profit margins.

Some companies are switching suppliers or redesigning products to avoid high-duty classifications.

Smaller retailers may struggle to absorb costs or compete with larger chains that can negotiate better deals.

Economic Ripple Effects
Tariffs can lead to job losses in retail and manufacturing if demand drops.

They may also slow GDP growth and increase inflation, especially if retaliatory tariffs hit U.S. exports6.

In short, tariffs on clothing don’t just affect trade—they touch your wallet, your wardrobe, and the broader economy.

Lesotho Debt
Lesotho carries a substantial stock of dollar-denominated (external) debt. In 2023 its total external debt stood at about 1.78 billion US dollars, down slightly from 1.81 billion in 2022.

That external debt represents roughly 62 percent of GDP, in line with its overall public debt level of 1.361 billion US dollars (61.51 percent of GDP) in 2023.

Within that external total, public and publicly guaranteed obligations alone accounted for just under 1.00 billion US dollars as of 2023.

[url=https://www.taxresearch.org.uk/Blog/2025/07/13/trumps-tariffs-are-destroying-hope/]Richard Murphy blog Trump’s tariffs are destroying hope[/url]

Lesotho Information at Wikipedia