The recent announcement of unprecedented tariffs by former U.S. President Donald Trump has sent shockwaves through small African economies, particularly Lesotho, Madagascar, and other nations dependent on exports to the United States.
These tariffs, part of Trump’s “reciprocal trade” strategy, have imposed massive levies on imports from these countries, with rates as high as 50%. The move has sparked widespread concern about its devastating impact on already fragile economies.
The Impact of Tariffs on African Nations
The Trump administration’s new tariff policy targets numerous African nations, with Lesotho bearing the brunt of the highest tariff at 50%. This small, landlocked country in Southern Africa relies heavily on textile exports, including denim jeans, to the U.S. under the African Growth and Opportunity Act (AGOA).
However, these tariffs have effectively nullified the benefits of AGOA, which previously allowed duty-free access for many African goods to the U.S. market.
Lesotho’s economy, with a GDP of just $2 billion and a per capita income of $975, is highly vulnerable to external shocks. The textile industry, which employs around 12,000 workers in 11 factories, is its largest private-sector employer and accounts for over 10% of its GDP.
With the imposition of a 50% tariff on its exports, Lesotho faces potential factory closures and widespread job losses. Trade Minister Mokhethi Shelile expressed grave concerns about the immediate economic fallout and emphasized the need for urgent dialogue with Washington.
Other African nations are also reeling from these tariffs. Madagascar now faces a 47% tariff on clothing and vanilla exports, Mauritius is hit with a 40% tariff, Botswana with 37%, and South Africa with 30%. These countries are grappling with increased costs of doing business and reduced access to the lucrative U.S. market.
Why Were These Tariffs Imposed?
President Trump justified these sweeping tariffs as part of his effort to address what he described as unfair trade practices. He argued that the U.S. had been “pillaged” for decades by countries benefiting disproportionately from global trade agreements.
The tariffs were calculated based on each country’s trade surplus with the U.S., leading to disproportionately high rates for smaller economies like Lesotho that export significantly more to the U.S. than they import.
For instance, in 2024, Lesotho exported $237 million worth of goods to the U.S., primarily textiles and diamonds, while importing less than $3 million in return. This trade imbalance was used to justify the steep tariff rate.
Economic Consequences for Africa
The repercussions of these tariffs are far-reaching. For many African countries, exports to the U.S. under AGOA have been instrumental in driving industrialization and job creation. The sudden imposition of tariffs threatens to reverse years of progress by making African goods less competitive in the U.S. market.
Lesotho’s economy is particularly at risk due to its heavy reliance on textile exports. The closure of factories would not only lead to job losses but also disrupt local supply chains and businesses that depend on the industry. According to Thabo Qhesi, CEO of the Lesotho Private Sector Foundation, the ripple effects could devastate the entire economy.
South Africa is another major casualty of these tariffs. Its automotive industry, which exports $2 billion worth of vehicles and parts annually to the U.S., will face significant challenges due to a new 25% tariff on imported vehicles.
A Shift in Global Trade Dynamics
As African nations grapple with these punitive tariffs, many are exploring alternative markets in Europe, Asia, and other regions. China has already stepped in by abolishing all import duties on products from 33 African countries as part of its strategy to strengthen ties with the continent.
Experts predict that these tariffs could accelerate a shift in Africa’s trading dynamics toward greater engagement with China and other emerging markets. However, this transition will take time and may not fully compensate for the loss of access to the U.S. market.
The End of AGOA?
The AGOA framework, which has been a cornerstone of U.S.-Africa trade relations since its inception in 2000, is now at risk of becoming obsolete. Analysts warn that Trump’s tariff policy undermines AGOA’s objectives by making it nearly impossible for African manufacturers to compete in the U.S. market.
South Africa’s Foreign Affairs Minister Ronald Lamola declared that AGOA’s benefits have effectively been nullified by these tariffs. He emphasized that this development would have severe implications for sectors such as agriculture, automotive manufacturing, and textiles across sub-Saharan Africa.