| Total | $3,296,578 million |
| Clothing | $84,242 million |
| Africa | $1,225 million |
| Kenya | $533 million |
| Lesotho | $355 million |
| Madagascar | $151 million |
| Tanzania | $79 million |
| Haiti | $532 million |
Lesotho’s Government Gazette typically announces pretty mundane things: Cabinet appointments, revisions of traffic regulations, annual financial statements, etc. The Gazette’s Bulletin #57, out on July 7 and labeled “Extraordinary,” is different:
“Pursuant to section 3 of the Disaster Management Act, 1997, and acting on the advice of the Board through the Minister in the Prime Minister’s Office, I, Nthomeng Majara, Acting Prime Minister of Lesotho, declare a state of disaster on socio-economic effects on high rates of youth unemployment and job losses in Lesotho which threaten the livelihood of the people of Lesotho. This declaration shall be for a period of two years with effect from the date of publication in the Gazette to the 30th of June, 2027.”
When Mr. Majara uses the term “disaster,” he isn’t exaggerating.
As a point of departure, since 1974, the U.S. has provided support for small and low-income countries through an array of “trade preference” programs (a technical term meaning “U.S. law waiving tariffs”). Two of these programs, the “African Growth and Opportunity Act” (“AGOA” in common usage) and “HOPE/HELP”, date to the early 2000s and have used clothing tariff waivers to underwrite and growth in Haiti and a number of African countries — Kenya, Madagascar, Tanzania, Ghana, as well as Lesotho and South Africa — for a generation.
Their last renewal and update came in 2015. It gave them a ten-year lifespan, which runs out on September 30, 2025. So, absent an urgent Congressional action, both stop at the end of this month. Some background on their impact, and the likely consequences:
Lesotho is a small, landlocked country of two million people in southern Africa. As we pointed out some months ago, its 33 garment companies are especially successful AGOA users, and are Lesotho’s largest sources of wage-paying jobs. (Top product: four million pairs of blue jeans.) Employment isn’t the industry’s only value: Southern Africa is the region hit hardest by the HIV/AIDS pandemic, Lesotho has the world’s second-highest HIV-positive rate at 19.3% of adults, and garment factories have joined the American PEPFAR program as large-scale providers of HIV treatment and education.
Haiti is as “preference-reliant” as Lesotho, shipping 47,500 tons of garments to American shops each year via Miami, topped by 195 million cotton T-shirts. Last year’s receipts were just under $600 million. This industry is “resilient” in policy jargon. Having weathered the 2007 Port-au-Prince earthquake — owing to factories built to international standards, on-site electricity generators, and dedicated transport services for workers — and though eroded by the past three years’ chaotic Port-au-Prince politics, it employed 24,850 hourly-wage workers at the end of July.
In practical terms, the end of these programs means that Lesotho’s jeans — now duty-free — will get both a 16.6% MFN tariff and the Trump administration’s 15% “reciprocal” tariff. That is, a 31.6% tax by Columbus Day as against none at all this week. Haiti’s duty-free T-shirts will get a 16.5% MFN rate and a new 10% “reciprocal” rate, for an overall 26.5% penalty. And though recitations of tariff rates can make for dry reading, again: when Mr. Majara uses the Government Gazette to announce a disaster, he isn’t exaggerating.
Lesotho’s clothing orders started drying up in the summer, and the garment economy is starting to collapse. Two first-hand accounts by American journalists from August illustrate the consequences:
National Public Radio: “Maqajela Hlaatsane, 54, has been working in Maseru’s garment industry for decades — a job that’s allowed her to raise her children on her own. Like many here she’s a single mother who has been empowered by joining the workforce. Now she’s unemployed and hungry, she says, pointing to the water bottle she carries around drinking to try to trick herself into feeling full. What food she has she’s saving for her family. ‘I’m here looking for a job,’ she says, standing on the street in the garment district where the smell of sewage fills the air. ‘My family can’t survive on water alone.’ Like many searching for work, she’s unclear why the U.S. imposed such massive tariffs on her desperately poor country, but they all keep repeating one name: ‘Trump, Trump, Trump.’”
NYT (subs. req.): “In ordinary times, Maseru’s residents greet the month’s end with an exhale, collecting their salaries and sometimes treating themselves to a little splurge. The Lapeng Bar and Restaurant in downtown Maseru usually draws crowds indulging in Maluti Premium Lager and tripe stew. But the end of July had been eliciting dread. Dread that their children might not be allowed to attend school next week, without enough money to pay their fees. And that they’ll fall further behind on bills. And that they’ll need to rely on family and friends to purchase food so they can eat more than once a day. ‘We are just hoping the Messiah can come,’ said Solong Senohe, the secretary general of Unite, a Lesotho textile worker’s union. For many people, like Neo Makhera, it was already too late for divine intervention. On Tuesday afternoon she huddled around a fire at the side of a road, selling loose cigarettes and vegetables. She’s been doing this, and offering to wash her neighbors’ laundry, since April when she lost her job sewing Reebok T-shirts and shorts.”
Last thought: In the world of American trade flows, the AGOA and HOPE/HELP numbers are pretty small. Last year’s $1.76 billion worth of African- and Haitian-stitched clothes made up about 2% of America’s annual clothing imports, and less than 0.1% of last year’s $3.3 trillion in imports. Unless you’re looking, you might not notice when they lapse. But in the economies of Haiti, Lesotho, and other African AGOA beneficiary countries, they’re very large. And this unfolding human disaster can still be arrested.
The two weeks left before the expiration date aren’t a long time — but they are still enough for Congress to act before the clocks run down.
PPI’s four principles for response to tariffs and economic isolationism:
News from Lesotho:
Acting PM Majara announces a national disaster.
… and the Lesotho Times reports.
On-the-ground reporting from the New York Times and National Public Radio.
And the Lesotho Embassy in DC.
And from Kenya:
Lesotho is far from alone in its alarm. Here for example is a headline from The Star in Nairobi: “Mass Job Loss Looms as Curtains Drawn on AGOA Pact.”
Program background:
The U.S. Trade Representative Office’s AGOA page.
And the International Labor Organization reports on Haitian garment workers.
