The Kingdom of Lesotho faces increasing unemployment rates due to US tariff hikes. Image: Adobe Stock via Money Web.
(The Post News)– The government of Lesotho has officially declared a state of disaster as the country faces a deepening economic crisis driven by mass youth unemployment, large-scale job losses, and increasing tariff threats linked to recent fallout with the United States of America (US).
The declaration, issued on 7 July, grants the government the power to implement special emergency policies that aim to fast-track job creation and provide economic relief measures over the next two years. All ministers have already been instructed to redirect 2% of their annual budgets toward job creation initiatives.
Just last month, Lesotho’s economy took a devastating hit as mass layoffs swept through the textile and garment industry, a sector that is the backbone of the country’s export economy and second only to the public sector in employment.
Factories in Maseru’s Thetsane industrial area suspended operations after US buyers began pulling out over fears of a looming 50% tariff on Lesotho’s clothing exports. While negotiations with the US are ongoing, the Trump administration has already imposed a 10% tariff, undermining Lesotho’s continued duty-free access to the US market under the African Growth and Opportunity Act (AGOA).
“If the tariffs were only 10%, we would still be operating,” said Solong Senohe, Secretary-General of the United Textile Employees Union. “Now, with the threat of 50%, nobody wants to place new orders.” The shutdowns have already forced thousands of workers to stay home without pay, and unions warn that up to 20,000 jobs could be lost if AGOA benefits are not renewed by September.
This marks a severe setback for the country, which was already grappling with high unemployment. In February 2025, Lesotho’s finance minister revealed that 38% of youth aged 15–35 were unemployed. The figure is expected to rise as uncertainty deepens in the garment industry, which is critical to the nation’s export economy. With 80% of Lesotho’s textile exports bound for the US, potential factory shutdowns or relocation to nearby countries could severely impact household incomes, migration patterns, and national economic stability.
As Lesotho awaits the outcome of ongoing trade negotiations with the US, for now, the disaster declaration may be a necessary step and provides a lifeline to many households impacted by the economic fallout.
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