The U.S. "reciprocal tariffs" have impacted the global economy. Among them, Africa's Lesotho (Lesotho) will be levied a 50% tariff on the reciprocal tariff list announced by U.S. President Trump, which is the highest rate this time. Trump has publicly ridiculed this small southern African country that "no one has ever heard of." Lesotho was once a diplomatic ally of Taiwan and was known as the "Denim Capital of Africa." The local OEM manufactures many denim brands, including the well-known brand Levi's, accounting for more than one-tenth of the country's GDP. Now that Trump has imposed heavy taxes, it is feared that it will severely damage the local economy.
According to Reuters, in March, Trump mocked Lesotho as an African country that "no one has heard of". Now it is subject to the highest tax rate, as high as 50%. Lesotho's exports are mainly textiles, and it has relied on the tariff-free treatment provided by the African Growth and Opportunity Act (AGOA) for many years. Its suppliers include internationally renowned brands such as Levi's and Calvin Klein. It was also a diplomatic ally with Taiwan in the past and is known as the "Jeans Capital of Africa."
According to The Guardian, the country has about 30,000 garment workers, and as many as 12,000 of these workers work in local mainland-owned and Taiwanese-owned factories to produce clothing for American brands such as Levi’s, Calvin Klein and Walmart. Taiwanese companies have more than 20 local factories and are deeply involved in the garment manufacturing industry chain.
According to "EBC Dongsen News", about 90% of foreign capital in Lesotho is Taiwanese businessmen. Lesotho's heavy taxation by the United States will also affect Taiwan. According to local Taiwanese businessmen, "It will be difficult for Lesotho to survive. The country may really... because these garment factories are almost half of the economic backbone of Lesotho. In the end, it will affect Taiwan, because the subsidiary production company is in Lesotho, but the parent company still pays taxes in Taipei."
In response to this tariff controversy, Lesotho Trade Minister Mokhethi Shellile said, "The latest policy direction adopted by the United States is shocking... It has always been a very important market for Lesotho." At present, local officials have contacted the U.S. Embassy to "clarify how and why Lesotho was included in such a high reciprocal tariff list." A high-level delegation will also be formed to go to Washington.