US tariff pause brings little cheer to Lesotho's textile industry
'It's very, very dire,' Lesotho's Trade Minister Mokhethi Shelile, said in an interview Monday. 'US buyers are not placing orders because they don't understand what is going to happen and there is still no clarity from the USTR,' Shelile said, referring to the Office of the US Trade Representative.
US President Donald Trump slapped 50% tariffs on Lesotho in early April — the highest in the world — when he unveiled sweeping reciprocal levies on trading partners. These were subsequently delayed until July 9 and could now be reimposed on nations who have not negotiated new deals.
The southern African mountain kingdom's biggest industry is textiles and the US is its largest export market.
It employs 12,000 people and supports 40,000 indirect jobs, selling clothes to US retailers such as Walmart Inc. and JCPenney.
Last year exports from to the US totaled $237.3 million — about 11% of the nation's $2.12 billion gross domestic product — while American imports from the country stood at $2.8 million, according to the USTR.
Lesotho has held talks with the US to reduce the tariff, according to Shelile. 'We submitted our second tariff offer that addressed issues which they wanted us to address specifically,' he added. 'We are waiting to be informed.'
The USTR didn't immediately respond to an emailed request for comment.
Maseru E-Textile Ltd. is one of the factories that's been impacted by reduced orders. About 90% or 1,000 workers are at home, said human resources manager Sebinane Maretlane.
They face an uncertain future if no progress is made in trade negotiations between Washington and Maseru, he said. 'We are waiting to hear from government on what is the outcome of the meetings.'
At least three other factories have also scaled back operations and furloughed workers, according to Tsepang Makakole, the general secretary of National Clothing Textile and Allied Workers Union, which has 2,000 members.
'Workers are now being sent home and told the layoffs are for three months,' said Makakole.
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