Maseru
The Minister of Trade and Small Businesses, Mokhethi Shelile, has responded to concerns over the 50% increase in reciprocal tariffs imposed by the United States.
Addressing the issue yesterday, he clarified that Lesotho’s tariffs on U.S. imports—including those influenced by currency manipulation and trade barriers—already stand at a staggering 99%. In contrast, the U.S. has imposed a 50% tariff on Lesotho, making it the highest-charged nation under this new policy.
Minister Shelile attributed this significant tariff disparity to an ongoing trade imbalance. Lesotho exports 99% of its goods to the U.S., while only 1% of its imports come from the U.S.
He highlighted that Lesotho’s exports to the U.S. are valued at approximately M4.7 billion, whereas U.S. imports into Lesotho amount to just M56 million further emphasizing the disproportionate nature of the trading relationship.
Shelile also shed light on a major challenge within Lesotho’s textile industry. Despite the country’s strong presence in this sector, only 40% of the work done in local factories involves Basotho workers.
The remaining 60% of textile production value—encompassing fabric sourcing and design—originates from other countries. As a result, a significant portion of the USD 240 million generated from textile exports benefits foreign economies. He illustrated this by citing a Chinese firm that ships 40 full containers daily, showcasing the international influence in Lesotho’s textile production.
Another critical issue raised was the lack of proper data on Lesotho’s use of U.S. digital services such as Android and Microsoft. Shelile emphasized the need for improved tracking of digital trade, identifying digitization as a key area requiring urgent investment to ensure comprehensive trade data collection.In response to concerns about production standards, the Minister announced that a new laboratory, valued at M90 million, is set to be established in Ha Tsolo.
Expected to be operational within two years, this facility aims to enhance Lesotho’s production quality and boost its industrial capabilities.The Principal Secretary (P.S.) in the Ministry of Trade and Small Businesses also stressed the importance of investing in the domestic market as a strategic response to potential job losses caused by the tariff hikes.
She noted that the Ministry is actively working to create employment opportunities by equipping local businesses to supply established retail stores within the country.
Meanwhile, the Minister of Finance and Development Planning, Dr. Retšelisitsoe Matlanyane, and the Minister of Foreign Affairs, Hon. Lejone Mpotjoane, reaffirmed Lesotho’s strong diplomatic ties with the U.S.
They urged the public to view the tariff increase as an opportunity for economic reflection and sustainable growth, rather than a punitive measure.
Local economist, Thabo Qhesi, warned that the increased tariffs could be catastrophic, not only for the textile industry but also for sectors such as transport, retail, financial services, and property development.
He expressed doubt that the government has a backup plan to address the potential job losses and economic gaps that could arise from these changes. “I don’t see the government having a fallback position to address the gaps to be created. It is clear that the production process cannot continue to export to the U.S. market where companies will now be forced to pay 50% tariffs. They will likely relocate to regions where it remains more profitable, especially after having enjoyed duty-free, quota-free access under AGOA since 2000,” Qhesi explained. He also highlighted that Lesotho’s garments are bought by major international brands like Gap, Levi’s, Reebok, Calvin Klein, and Jean’s Wear, emphasizing the importance of the sector to the country’s economy.
