Trump’s tariffs could cost Lesotho 30,000 jobs, the IMF warns

Lesotho’s coat of arms at Makoanyane Square in Maseru. Tariff changes could halve the country’s exports to the United States, the International Monetary Fund has warned. Photo: Sechaba Mokhethi / GroundUp

A sudden and destabilising shift in US trade policy has shaken the foundations of Lesotho’s fragile economy, threatening its vital textile industry and the livelihoods of approximately 30,000 workers, mostly women, says the International Monetary Fund.

Garments make up 80% of Lesotho’s exports to the United States, which accounts for roughly 20% of the country’s total exports.

The first blow was the newly imposed 15% tariff on Lesotho’s textile exports. The IMF says this has weakened a central pillar of an economy already struggling with low growth and high unemployment. This coupled with the threat of a much higher 50% tariff — which was initially announced in April 2025, and remains a possibility — means significant new orders for the US market are unlikely to resume until the uncertainty is lifted.

The immediate fallout is already visible. The threat of steep tariffs has halted new US orders, and the IMF warns that without clarity, demand for Lesotho garments will not recover. This is devastating for a sector that, even under the duty-free African Growth and Opportunity Act (Agoa), was “already struggling” to remain competitive.

Lesotho was already losing ground to regional rivals like Kenya and Tanzania, which now face less of a tariff threat.

Hundreds of Lesotho diamond mining jobs to be axed following US tariff threats

Sechaba Mokhethi  30 Jul 2025

The IMF document estimates that prohibitive tariffs could slash Lesotho’s US exports by 50% in just one year, and by as much as 70% in the medium term. The result: a permanent 0.5 percentage point cut in Gross Domestic Product (GDP) growth.

Faced with the tariff shock, Lesotho sent a high-level delegation to Washington a fortnight ago to lobby for the extension of Agoa and for tariff reductions that would restore preferential access for Lesotho’s garments.

With Agoa set to expire at the end of September, the team is pressing for urgent commitments to protect jobs.

The IMF has downgraded Lesotho’s GDP growth forecast from 2.2% in the previous year to just 1.4% for 2025, with medium-term growth expected to stagnate at 1.5% — a rate which is not high enough to improve per capita income.

This article was originally published on GroundUp.

© 2025 GroundUp. This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.