For a tiny southern African nation that President Donald Trump said that “nobody has ever heard of,” Lesotho appears poised to shoulder the brunt of his so-called “reciprocal” tariffs, which are set to replace the “universal” 10 percent rate on U.S. imports when a 90-day pause wraps up in early July.
At 50 percent, Lesotho’s threatened duty is higher than any other country save China, which is currently grappling with a 145 percent tariff. For the White House, this is simple calculus: In 2024, the United States imported $237 million worth of goods from Lesotho. In return, Lesotho imported just $2.8 million of American-made products. This, the president has claimed, just isn’t fair.
But Lesotho is a country that is already on the precipice, with 75 percent of its 2.3-million-strong population classified as either poor or vulnerable to poverty. Its gaping trade deficit stems not from maliciously unequal trade but from the fact that garment manufacturing forms a significant part of its economy. Some 75 percent of the jeans, T-shirts and polo shirts its dozen-or-so factories pump out every year, in fact, are destined for brands such as Levi Strauss & Co., Calvin Klein, The Children’s Place and Walmart in the United States.
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The work isn’t especially profitable, but it’s been more stable than anything in the informal economy. The sector’s 30,000 mostly female workers earn a minimum wage that ranges from 2,582-2,860 Lesotho loti ($141-$156), or roughly one-third of what would amount to a living wage in the capital of Maseru, according to the WageIndicator Foundation. A big part of their livelihood has relied on the duty-free benefits their products receive under the 25-year-old African Growth and Opportunity Act, or AGOA, which expires in September with no sign of a possible renewal and, in any case, has been rendered effectively moot with the 10 percent “Liberation Day” tariff.
A program manager at a nonprofit in South Africa, who requested anonymity in order to be able to speak freely, isn’t sure Lesotho can survive the 90 days, let alone make it to September. He’s heard widespread reports of factories holding back orders because their buyers are waiting to see if cooler heads in the White House will still prevail. He expects workers to be furloughed, if not laid off completely. Even the 10 percent tariff will exert undue pressure on suppliers’ already razor-thin margins if they’re expected to pick up the tab.
“This is just one of the things that is going to create a crisis for Lesotho,” the person said. “You can only imagine as well the amount of exploitation that might happen: the increase in trafficking and the rise in gender-based violence. Parents who are desperate will start trafficking their children. I don’t think they can take the squeeze.”
The 30-plus other AGOA nations, many laden with heavy foreign debt, are in a similar tailspin, though some more than others. While goods from Ethiopia, Ghana and Kenya have been hit with a 10 percent proposed tax, no different from the “universal” rate, those from Mauritius, Madagascar and South Africa face duties above 30 percent.
The tariffs also arrive as sub-Saharan Africa is still coming to terms with the withdrawal of billions of dollars of U.S. Agency for International Development funding for programs involving medical care, education and economic development. Far from instilling fairness, experts say that the United States risks upending what have been cornerstones of trade and diplomacy with the African continent, with repercussions beyond balancing its ledger.
“President Trump’s decision to increase tariffs on AGOA-eligible countries, alongside the administration’s dismantling of USAID, could have a devastating impact on the workers and communities who benefit from the textile and apparel sector in the regions,” said Kenya Wiley, policy counsel and fashion law professor at Georgetown University. “It not only goes against the original intent of AGOA—to reduce trade barriers and foster economic development in sub-Saharan Africa—but it also comes at a time when the administration should be working with Congress and industry stakeholders to strengthen the trade program during its 25th anniversary year, and before AGOA’s expiration.”
Sandra Zhao, co-founder of Zuri, a line of $160-$210 dresses sewn in Kenya using batik fabrics from Ghana, India and Kenya, isn’t prepared, either for the tariffs or the disappearance of AGOA. She operated on the assumption that things would work out since support for Africa has been bipartisan. With Zuri’s first shipment under the 10 percent tariff rate en route to the United States, reality is starting to set in.
“We’re working with our factory in Kenya to try and figure out what we need to do, but part of the challenge with all of this is that there’s very little information; there’s been so much unpredictability and backtracking and change,” she said. “It almost feels like do-it-and-find-out, which is really not a way that any small business wants to run, especially when we’re very conscious of costs and trying not to pass it onto our customers or put it on our producers. We are internally trying to assess what is our appetite like? What is our ability to absorb?”
Zhao is bracing herself for September, when there might be more clarity on where import taxes stand. Making the clothes in the United States isn’t an option because it would waver from the sustainable employment focus of Zuri’s ethos, which is very much grounded in improving conditions in the global South. Plus, it would still have to import the fabrics and buttons it would need.
“At the end of the day, we do this work because we want to make beautiful clothing, but also because we’re very conscientious about the ability to have a lasting, positive impact through sustainable jobs,” she said. “And there certainly could be a point where we have to say we can’t do it because it’s important for us to pay our vendors fairly. It’s impossible for us to imagine that we would go to a point where we would have to squeeze them when they’re already operating in very challenging circumstances.”
The ‘wrong direction’
For more than two decades, trade groups like the American Apparel & Footwear Association have held up AGOA as a success story for both U.S. brands and African suppliers. The organization, which represents household names such as American Eagle Outfitters, Gap Inc., J.Crew Group and H&M Group, has been growing increasingly frustrated at the deal’s stagnation, which it partially attributes to a decline in trade that it says multiplies economic benefits for a traditionally underserved population: women. In 2024, AGOA imports totaled $8 billion, down 13 percent from $9.3 billion in 2023 and 22 percent from $10.3 billion in 2022.
“U.S.-Africa policy seems to be going in the wrong direction,” said Steve Lamar, president and CEO of AAFA. “We should be signaling to our members to make long-term sourcing decisions in Africa through a long-term renewal of AGOA, which is set to expire in just under four months. Instead, the Trump administration is encouraging companies to avoid Africa by imposing crushing tariff burdens.”
Washington’s “parallel actions” to terminate programs funded by USAID and the Department of Labor’s Bureau of International Labor Affairs, which “strengthen the ability of African communities and workers to be better trade partners,” only make this situation worse, he said. Putting “America First,” he added, means providing U.S. workers with a level global playing field.
“We urge the Trump Administration to refocus on the natural leverage created by AGOA, and which has shown demonstrated benefits for U.S. industries and workers—including the American cotton and textile market—during its 25-year history, to maintain U.S. leadership on the continent and to ensure that our thriving partnership is not usurped by others who do not share our values,” Lamar said.
The turmoil is an acute one for Paloma Schackert, co-founder and chief operating officer of Ethical Apparel Africa, a sourcing and manufacturing social enterprise in Benin and Ghana. Part of its work has been helping local manufacturers become export-ready, both in terms of technical competence and compliance. Because “no investor is going to pay for six to nine months of training and intensive support,” Shackert said, Ethical Apparel Africa leaned heavily on a significant grant from USAID for its upskilling efforts, “which is now gone.”
“What that means in practice for the local SMEs is we’re no longer able to support them to make that drive to sustainability and to export, so we’ve had to completely let that work go, which is very painful, because they already have made so much progress,” she said, using an acronym for small and medium-sized enterprises. “So factories that were on the cusp of being able to export and scale jobs are no longer able to progress. And it means that brands are able to source less than they want to from the region.”
While Ethical Apparel Africa’s own manufacturing-side business in Ghana is facing “unprecedented” demand because the country’s 10 percent tariff is still a deal compared with Bangladesh and Vietnam’s threatened 37 percent and 46 percent, respectively, Schackert said, losing AGOA would still weigh heavily on the continent at large because of what it means for medium-to-long-term investments, especially those involving vertical integration for textiles. Coalescing capacity-building efforts, allowed to fully manifest, could provide alternatives for businesses looking to diversify away from Asia—even provide a counterpoint to China’s massive manufacturing engine.
“Those efforts are definitely going to be highly derailed, because these programs were not only building just a temporary skill set, they were bringing those skills to the people of Africa, who are mainly agri-based economies, by giving them skills which are going to last with them for the lifetime,” said Vikas Budhiraja, senior vice president at ARISE Integrated Industrial Platforms, which develops industrial ecosystems across the continent. Many of them are “greenfield” factories, meaning they were built on previously undeveloped, probably rural, sites. For now, it’s too early to say how his business will be affected.
“Africa could have been avoided at this juncture, because on one side we are seeking another AGOA renewal, so that we become a self-sustained supply chain-centric continent, rather than importing most of our stuff from other countries, like China, India, Bangladesh and Vietnam,” he said. “If AGOA does not happen and tariffs make exporting goods more expensive, we would not be in a position where we can directly compete with the mature textile and garment destinations despite the young manpower and abundant raw material like cotton.”
And while African nations may try to mitigate losses by pivoting toward the European Union, the African Continental Free Trade Area and Asian markets, reorienting trade flow takes time, investment and new market development, said Daphne Kasambala, founder of Meekeno, a B2B wholesale e-commerce platform for African SMEs. Considering their integration with the U.S. garment industry, Lesotho, Madagascar and Mauritius could stand to lose the most from the proposed tariffs. If U.S. orders drop “as expected” because goods become more expensive, she added, factories will scale back or close, potentially shedding thousands of jobs and, ironically, driving an even larger trade deficit.
“What makes these tariffs particularly devastating is their unpredictability. They call into question whether African countries can rely on U.S. trade preferences as a long-term strategy,” she said. “In effect, they penalize the very economies that AGOA was designed to uplift, despite these countries playing by the rules. At a time when Africa is seeking to boost value-added exports and integrate into global supply chains, moves like this erode confidence, stifle investment and push manufacturers toward more stable trade environments in Asia or elsewhere. If the goal is to compete with China, undermining one’s own partners is a puzzling strategy.”
Confronting China
Countering China’s growing influence in sub-Saharan Africa will also prove more difficult without high-road businesses that have instituted some guardrails against exploitation—however effective they might ultimately be. China axed tariffs on goods from 33 African nations in December. Joanna Maiden, founder and SEO of Soko Kenya, an ethical clothing factory that provides its workers with in-house training and free childcare and lunch, worries that it and others that seek to side-step their even-higher tariffs, could swoop in as “investors” that are only interested in leveraging the continent’s low-wage labor and won’t consider broader questions of infrastructure and human resource needs. As it stands, Soko Kenya has lost USAID grants that allowed it to provide gender-based upskilling programs involving reproductive health and combating sexual violence. It also expects to train fewer students this year.
“Every time I go to an international fashion event, like a trade show or a conference, I always get told, ‘Oh, Africa is the next continent,’” she said. “But, on the ground, I see us really struggling in terms of how we don’t have everything around the corner, like India, China, Bangladesh and the other manufacturing hubs. We don’t have the raw materials, we don’t have the trims, we don’t have the generations of experience in terms of efficiency and how to set processes up. And so we need that external expert knowledge on the ground to support us and to gain efficiencies and to be more competitive. And the fear is that we fall further behind.”
At the same time, this could be a wake-up call for Africa, said Natalie Schrogl, lead management consultant at Cassini Consulting in Munich, where she specializes in African-European relations. She said that the G20 summit in South Africa in November could allow for the further reconfiguration of trade deals that are less one-sided and more diversified.
“When you think about most of the partnerships that we’ve had, they’ve not really been equitable,” Schrogl said. “We really need to make sure that we’re pushing for agreements that are not unilateral—agreements that somebody cannot just wake up and decide they want to change something without considering that they are affecting a whole economy. These are more than tariffs. These are jobs. These are livelihoods.”
As far as she’s concerned, AGOA is dead in the water and will remain that way as long as Trump is in office. And even then, the United States will have a long road ahead if it hopes to regain Africa’s trust.
“It was supposed to be a win-win; we are fragile and this shows another level of fragility because we’ve been literally exposed,” Schrogl said. “But I think the question that I ask myself is, have we ever been partners?”
Lesotho likely wishes that Trump had continued to remain ignorant of it. A 50 percent tariff, on top of AGOA’s expiration, could decimate an entire industry that only recently came to terms with its endemic culture of gender-based violence and harassment, forging the world’s first binding agreement tackling the same in 2021 and setting the stage for the similar Dindigul Agreement to Eliminate Gender-Based Violence and Harassment and Central Java Agreement for Gender Justice in 2022 and 2025, respectively. U.S foreign aid played a significant role in facilitating that.
While the Trump administration says that Lesotho charges a 99 percent tariff on U.S. goods, the country’s government is unclear how it arrived at that number. And according to the United Nations Trade and Development Program, collecting that 50 percent retaliatory duty would only contribute 0.019 percent of U.S. tariff revenues.
“It’s a very desperate situation, especially when you look at its HIV statistics and think about how it’s going without aid and without proper treatment,” the South African program manager said. “We were only beginning to shift the needle. Gains will be delayed. And if there aren’t any more buyers, what will happen to that country?”