Lesotho has declared a national state of disaster in response to soaring unemployment and widespread job losses triggered by recent U.S. trade policies. In April 2025, the Trump administration imposed a 50% tariff on imports from Lesotho—the highest tariff rate applied to any country—under its "reciprocal tariffs" policy. This drastic measure severely disrupted Lesotho’s textile industry, which represents about 90% of the country’s manufacturing exports and employs roughly 40,000 people.
The tariff uncertainty led to the cancellation of many U.S. orders and mass layoffs, even before final decisions were confirmed. To mitigate the crisis, the state of disaster declaration, effective until June 2027, grants the government enhanced powers to implement emergency measures, including redirecting funds toward job creation and economic recovery. Early actions include eliminating business registration fees for small and medium enterprises.
Before these tariffs, Lesotho was a significant beneficiary of the U.S. African Growth and Opportunity Act (AGOA), which allowed duty-free access to U.S. markets for eligible African countries. The loss of AGOA benefits, combined with the new tariffs, has further strained Lesotho’s fragile economy, threatening to reverse two decades of progress.
In response, Lesotho is actively pursuing alternative markets through the African Continental Free Trade Area (AfCFTA) and engaging diplomatically to negotiate tariff reductions and restore AGOA privileges. The crisis highlights the vulnerability of small economies to global trade shifts and underscores the need for international cooperation to support developing nations.