How Tiny Lesotho Became the Most Heavily Tariffed Country by the United States
In a surprising twist of international trade dynamics, the small, landlocked African nation of Lesotho—known more for its mountainous terrain than global trade influence—has found itself at the top of a most unexpected list: it currently faces the highest average U.S. tariffs of any country in the world.
According to the latest data compiled by the U.S. International Trade Commission (USITC), Lesotho’s exports to the United States are subject to a staggering average tariff of nearly 38%. This is significantly higher than the tariffs faced by major trade adversaries like China or Russia, drawing attention to the sometimes unpredictable outcomes of U.S. trade policy.
How Did This Happen?
Lesotho’s elevated tariff status stems not from political conflict or trade disputes, but rather from the expiration of critical trade preferences. For years, Lesotho benefited from the African Growth and Opportunity Act (AGOA), a U.S. trade initiative enacted in 2000 to stimulate economic development in sub-Saharan Africa by providing duty-free access to American markets for eligible countries.
AGOA played a transformative role in Lesotho’s economy, especially its textile and apparel industry, which employed tens of thousands and served as a cornerstone of the country’s GDP. Lesotho became one of the success stories of AGOA, exporting millions of dollars worth of clothing to U.S. retailers.
However, AGOA preferences must be renewed by the U.S. government, and eligibility is reviewed annually based on governance, human rights, and labor standards. In 2024, the U.S. Trade Representative’s office determined that Lesotho no longer met the necessary criteria for continued inclusion in AGOA—reportedly due to concerns over labor rights violations and political instability.
The Economic Impact
The fallout has been immediate and severe. Without AGOA benefits, Lesotho’s exports are now subject to standard U.S. Most Favored Nation (MFN) tariffs, which are significantly higher—especially for textiles. Some apparel items now carry duties as high as 32% or more, contributing to the overall average tariff of nearly 38%.
This has made Lesotho’s goods far less competitive in U.S. markets, leading to order cancellations, factory closures, and job losses in a country where employment opportunities are already scarce.
A Larger Pattern
Lesotho is not alone in facing the consequences of AGOA eligibility reviews. Several other African nations, including Ethiopia and Mali, have also been removed from the program in recent years. Critics argue that while human rights and governance standards are vital, the sudden withdrawal of trade benefits can have devastating effects on populations that have little influence over their governments’ decisions.
There is also growing debate about whether AGOA, which expires in 2025 unless renewed by Congress, should be reformed to offer more stable, long-term access rather than year-to-year uncertainty.
What’s Next for Lesotho?
The Lesotho government has expressed hope that it can regain AGOA eligibility by addressing the concerns raised by the U.S. Trade Representative. However, meaningful political and labor reforms may take time—time that Lesotho’s economy may not have.
In the meantime, the country is seeking to diversify its export markets and attract investment from other partners, including China and the European Union. But replacing the U.S. as a major trade partner will be a formidable challenge, especially given the scale of apparel exports previously shipped under AGOA.
Lesotho’s case serves as a sobering reminder of how international trade policy—even when well-intentioned—can create unintended consequences, especially for small nations heavily reliant on a single sector or market.
Source : Swifteradio.com
