Tariff concession comes too late for Lesotho
The US has set a tariff of 15% on imports from Lesotho, according to an announcement from the White House at the end of July.
In the major tariff announcements that US president, Donald Trump, made in April, he said the rates for Lesotho would be 50%. It was one of many places that exported much more to the US than it imported from there, creating a trade deficit.
Even though the rate has ended up being substantially lower, garment manufacturers in Lesotho have said the reprieve has come too late.
The garment industry is the largest source of private-sector jobs in Lesotho and 20% of the industry’s export revenues come from shipments to the US. Companies that import clothing from Lesotho include Reebok, Wal-Mart and Levi’s, according to a recent report by the Wall Street Journal.
A months-long threat of 50% tariffs had already caused orders to dry up, the newspaper said, with production lines stopping and workers being sent home. Lesotho’s trade minister, Mokhethi Shelile, said a trade deficit had built up because, for 25 years, the country had duty-free access to the US market under the African Growth and Opportunity Act (AGOA).
AGOA will expire this year and the WSJ said the current US administration’s widespread application of tariffs on countries that have benefited from it suggested any further renewal of the act is unlikely.
“We took advantage of the trade concessions, being a small country,” Mr Shelile said. “I did not expect that to be a reason to be punished.”
