When the Sky Falls: Lesotho Says US Tariffs Will ‘Kill’ the Country

When US President Donald Trump mentioned Lesotho in his speech to Congress in early March, he referred to the small, mountainous kingdom in southern Africa as “the country that no one ever heard of.”

The audience laughed.

Lesothans, however, were baffled that the president of the world’s most powerful country would “insult” them so during such an important speech.

A month later, however, Lesothans are truly bewildered – the tiny country of 2.3 million, one of the poorest in the world, was hit with 50 percent US tariffs, the highest rate in the world.

It set off panic in the country.

“This has been a devastating day for us,” Teboho Kobeli, founder of Lesotho clothes manufacturer Afri-Expo Textiles, which employs 2,000 people, told the BBC after the announcement of the tariffs. The US is so significant that “we can’t just shelve the US market … we need to do everything we can to bring (it) back,” he added.

On Wednesday, President Trump paused most tariffs for 90 days but it is still unclear whether Lesotho or other countries will face these hikes, or what the rates will be.

Lesotho, known as the “kingdom in the sky” because it has the world’s highest base altitude of any country, has a gross domestic product of around $2 billion. About one-fifth of Lesothans are unemployed. And at least one-third exist on less than $2 a day.

As a result, the country is heavily dependent on its textile sector, known for producing apparel for brands such as Levi’s, The Gap, and Walmart, and which employs about 40,000 workers. It is Lesotho’s biggest private employer and accounts for about 90 percent of manufacturing employment and exports.

The tariff “is going to kill the textile and apparel sector in Lesotho,” Thabo Qhesi, a Lesotho-based economic analyst, told Reuters. “Then you have (the shopkeepers) who are selling food (to the textile workers). And then you have residential property owners who are renting houses for the workers. So this means if the closure of factories were to happen … there will be multiplier effects.”

As a result, he added, “Lesotho will be dead.”

The reciprocal tariffs were targeting “countries that treat us badly,” Trump said, earlier this month, adding that the US had been taken advantage of by “cheaters” and had been “pillaged” by foreigners.

The tariffs hit dozens of countries around the world, but most incurred lower rates. They were set by a formula that has confounded analysts, with countries such as Kenya, far richer than Lesotho, seeing rates of with 10 percent.

As a result of the formula for the tariff, which calculates the US trade deficit in goods with a particular country then divides it by the amount of goods imported into the US from that country essentially means that countries which import only small quantities of American goods, such as Lesotho, Madagascar or the Falkland Islands, have been hit with higher tariffs than much richer countries.

“Only the formula could also ignore … (that the) Basotho, (the people of Lesotho), produce a lot of Levi’s jeans, but very few can afford a first-hand pair especially after a decade of falling real GDP per capita,” wrote the Financial Times.

Lesotho’s exports to the United States, which in 2024 totaled $237 million, account for about 10 percent of its GDP.

Also, the new tariffs on African countries signaled the end for the African Growth and Opportunity Act set up by the US Congress two decades ago to help African economies develop through preferential access to US markets, which had led to the development of the textile industry in Lesotho in the first place, the newspaper added. The tariffs Lesotho sets on goods protected the textile industry.

The tariffs violate the spirit of the act, say analysts, which expires in September unless it is renewed by Congress.

Meanwhile, Lesotho is also struggling with the recent cuts to the US Agency for International Development programs, which essentially paid for Lesotho’s health care sector via its HIV/AIDS programs – Lesotho has one of the highest rates of infection in the world.

Lesothan officials believe there must be a mistake. They hope the tariff pause will become permanent. And they say they plan to appeal to the White House to explain how such a rate on their goods cannot be possible.

At the same time, there is a mad scramble to figure out what to do – with some saying they will have to look for other markets.

“It’s time to be exploring our possibilities elsewhere,” Lesotho’s trade minister, Mokhethi Shelile, told South African broadcaster SABC. Still, he added that he worried that the country wouldn’t survive the double shock of the tariffs and the USAID cuts.

Workers also wonder if they will survive.

“My hope and wish is that our prime minister could somehow reach out to President Trump and ask him to at least show some compassion for Lesotho,” Nthabiseng Khalele, a garment factory worker, told the Guardian. “If we lose our jobs here, I’m almost certain that many of us will end up sleeping on empty stomachs.”