(Bloomberg) — One of the world\u2019s poorest countries is reeling from the impact of US President Donald Trump\u2019s tariff regime, which has crippled its key textile industry and exacerbated already high unemployment.<\/p>\n
Most Read from Bloomberg<\/p>\n
That\u2019s how the historic pivot in US trade policy is unfolding in Lesotho, the landlocked, southern African mountain kingdom whose denim manufacturing has been a rare economic bright spot. Trump initially put 50% levies on imports from Lesotho, the highest in the world. Despite a cut to 15% in August, those duties still outstrip those on competitors like Kenya, and some factories have eliminated jobs as orders dried up.<\/p>\n
\u201cWe are still in negotiations with the US government on a further reduction, maybe to 10% or to zero \u2014 where we were before,\u201d Prime Minister Sam Matekane said in an interview with Bloomberg Television\u2019s . \u201cThe introduction of the tariffs have put us in a disadvantaged position\u201d because businesses can relocate to countries where levies are lower, he said.<\/p>\n
WATCH: Wall Street Week\u2019s David Gura reports from Lesotho\u2019s capital, Maseru, where US tariffs are hitting hard on denim manufacturers.Source: Bloomberg <\/p>\n
Textiles is the biggest industry in Lesotho, a country of about 2.3 million people. Those businesses employ 12,000 people and indirectly support 40,000 jobs, supplying US retailers such as Walmart Inc., JC Penney and Levi Strauss & Co. Before the new tariffs, most of of the country\u2019s exports to the US \u2014 its second-biggest trade partner \u2014 entered duty-free under the now-defunct African Growth and Opportunity Act.<\/p>\n
Before Trump took office, Lesotho\u2019s central bank forecast modest expansion this year and next for textile and clothing manufacturing. The new outlook: contractions of 9.9% and 13.3%. Trump\u2019s tariffs are based on countries\u2019 trade balance with the US, and Lesotho imported less than $3 million in goods from the US last year, compared with exports of more than $235 million.<\/p>\n
Teboho Kobeli, the founder of Lesotho-based Afri-Expo Textiles, said the tariffs came as a major shock, comparable with the coronavirus pandemic. At the very least, Trump\u2019s targeting of the country serves as a \u201cwake-up call\u201d and an opportunity to change the way the economy operates. Unemployment was 30% last year, the most recent data show, ranking among the world\u2019s highest.<\/p>\n
\u201cI would say \u2018Thank you, President Trump, for making Lesotho known,\u2019\u201d he said. \u201cFor the president of a powerful country like the US to mention Lesotho in his Congress is, you know, a powerful marketing tool.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — One of the world\u2019s poorest countries is reeling from the impact of US President Donald Trump\u2019s…\n","protected":false},"author":2,"featured_media":242329,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,1071,99,2490,164,144588,144587],"class_list":["post-242328","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-bloomberg","tag-business","tag-donald-trump","tag-economy","tag-lesotho","tag-worlds-poorest-countries"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/242328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=242328"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/242328\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/242329"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=242328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=242328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=242328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}