FACT: Americans are buying 22 tons of Ukrainian honey daily.

THE NUMBERS: Vessel calls at three Ukrainian Black Sea ports —

Lloyd’s List, Feb. 2025. The ports are Odesa, Chornomorsk, and Yuzhni.

WHAT THEY MEAN: 

A cautious International Monetary Fund mid-year evaluation of Ukraine’s economic outlook balances risk and ‘resilience’ this June:

“Russia’s war continues to take a devastating social and economic toll on Ukraine. Nevertheless, macroeconomic stability has been preserved through skillful policymaking as well as substantial external support. The economy has remained resilient, but the war is weighing on the outlook, with growth tempered by labor market strains and damage to energy infrastructure. Risks to the outlook remain exceptionally high and contingency planning is key to enable appropriate policy action should risks materialize.”

The Fund’s bottom-line April projection was 2.0% GDP growth this year; the June outlook is a slightly brighter “2 to 3 percent.” This is by no means a boom, and a point below Poland’s 3.2%; but it’s also noticeably above the Fund’s 1.5% guess for Russia, the 1.3% and 1.4% for neighboring Hungary and Slovakia, and also the 1.8% for the United States.

Ukrainian-economy background on this, shifting from the Fund’s “macro” world of growth, employment rates, and fiscal balances to the “micro” world of defense factories, seaports, and farm exports.

Industry: Ukraine’s industrial economy is evolving rapidly, as the war helps create a high-tech military industry and to an extent diminishes the centrality of the large “oligarchy” iron, steel, and grain industries Ukraine inherited from the Soviet era.  PPI’s Kyiv-based New Ukraine Project Director Tamar Jacoby explains:

“The 2022 invasion reinvigorated a domestic defense industry that had atrophied beyond recognition since Soviet times. Thousands of IT technicians and engineers dropped whatever they were doing in peacetime to join the defense sector or enlist in the army and provide technical support on the front line. Today, some 700 defense manufacturers employ more than 300,000 technicians and sustain scores of other companies making weapons components and dual-use products.”

These are mostly start-up businesses — state-owned firms accounted for 80% of defense production in 2022, and now less than 30% — and they produce quite a lot. Per Jacoby, since 2022, Ukraine has multiplied its artillery-shell production about 25-fold, and upped drone production from fewer than 2,500 drones to a likely 4.5 million this year. The economic effect is to enlarge Ukraine’s world of small tech-oriented manufacturing, and (relatively) shift GDP away from large state-owned heavy industry plants. On the military side, it has underwritten a stunning and continuing naval success: without a single capital ship of its own, Ukraine used home-designed drones to sink a third of the Russian Black Sea Fleet’s 74 ships by the end of 2023 and has forced the rest to shelter out of range in the east ever since.

Farm Exports and Rural Economy: This naval victory in turn reopened Ukraine’s main Black Sea trade route by the end of 2023. The Lloyd’s List ship arrival figures, showing vessel calls quadrupling in 2024, mean both steady flows of consumer goods into Ukraine and export income for industrial and rural communities.

Early that year, we cited honey as a kind of bellwether. This is a traditional Ukrainian standard: UN Food and Agriculture Organization stats found prewar Ukraine the world’s fourth-largest honey producer, with 200,000 professional beekeepers plus another 200,000 part-timers and hobbyists, 2.3 million bee colonies, and about 70,000 tons of honey produced for sale annually. (For context, the U.S. last year had about 120,000 professional and part-time beekeepers. They managed 2.6 million colonies and produced 69,500 tons of honey.) By the end of 2024, Americans had bought a record 12,300 tons of Ukrainian honey. This year’s total will probably be a bit lower, but still above the pre-war averages:

Estimates for 2025 based on January – July U.S. Census totals.

Back to Macro: The honey figures — and those for iron and sunflower oil are similar — illustrate some of the IMF’s “resilience” in practice. Export income is flowing to Ukraine’s beekeepers. The manufacturing, packaging, and transport services needed to collect honey and package it for sale abroad work, and financial systems likewise. And busy seaports are supporting large-scale commodity trade, with cargo flows doubling the levels of 2022 and 2023.

This doesn’t negate the high risks the IMF mentions, nor the Ukrainian government’s challenges in covering wartime budgets. But it does show Ukraine’s economy holding up well, from soldiers at the front to naval specialists keeping the Russian fleet in port, the creativity and rapid growth of drone-design labs and factories, to beekeepers and sunflower farmers on the land.

FURTHER READING

From PPI:

Kyiv-based Tamar Jacoby directs PPI’s New Ukraine Project, with in-depth research and regular reporting on Ukrainian daily life, the mood at the front, industrial evolution, anti-corruption programs, and more. Recent samples:

• Ukraine’s new military industry.
• Mr. Trump’s Alaska fiasco.
• At the front in March.

And our February Trade Fact on the Ukrainian cause, the Trump administration and Vladimir Putin, and the principles underlying successful American foreign policy: Isolationism and appeasement are dangerous.

Ukraine economy:

From the International Monetary Fund, basic Ukraine-economy stats and the mid-year 2025 evaluation.

Lloyd’s List tallies ship arrivals at Odesa, Chornomorsk, and Yuzhnyi.

Politico/EU reports on Ukrainian farming in wartime, oligarchs v. startups, and economic reform.

EU statisticians track Ukraine-European trade flows.

And Germany’s Kiel Institute monitors U.S., European, UK, and other aid programs.

Some “sweetness and light”:

Our March 2024 look at Ukrainian beekeeping, honey, the war, and Black Sea trade.

Agricultural specialist and translator Alisa Koverda explains Ukraine’s beekeeping culture and its wartime adaptation in 2022.

The UN’s Food and Agricultural Organization has worldwide data, and USDA has a U.S. closeup.

… and Фундація Жінок Пасічниць (Fundatsiya Zhinok Pasichnish for non-Cyrillic readers; translated, Foundation of Women Beekeepers), with honey contacts and beekeeping tips.

And last:

Special note: We’re proud to note that this Trade Fact is the 200th in our revived series. We are grateful to PPI’s generous supporters for their commitment to our values and work, and we thank friends and readers in the U.S. and worldwide for your ideas, reactions, and occasional critiques.

Read the full email and sign up for the Trade Fact of the Week.

FACT: The U.S. African and Haitian trade preference programs end this month.

THE NUMBERS: U.S. imports 2024 –

WHAT THEY MEAN: 

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.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

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.

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