The best exporter of African clothing could “fall back” under American prices, said the minister

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The Lesotho Minister of Commerce warned that the country’s textile industry, a major exporter of brands such as Levi’s and Wrangler in the United States, risks “folding” if Donald Trump pushes with 50% of prices.

Mokhethi Shelile told Financial Times that a national “disaster” said this week would allow the government to monitor the creation of 60,000 jobs in other sectors for two years, while it is preparing for the end of the break on the so-called Liberation Day rates that the American President announced in April.

“We look forward to the possibility that we have a good favorable rate and this favorable rate … can only be 10% or less,” said Shelile. “Everything that is beyond that, we fear that our textile industry that exports to the United States will have to change towards other markets or simply withdraw.”

Lesotho, an unexpected success born from the Washington African growth and opportunity law (AGOA) which offers access without prices to the continent, has recently been rejected by Trump as “a country that no one has ever heard”.

The 2.3 million mountain kingdom is the largest African clothing exporter in the United States, which in April threatened to impose a 50% rate on its exports, one of the highest rates in all countries.

The Lesotho dynamic textile industry is the country’s largest private employer, representing around 40,000 jobs, but there have been mass layoffs since the prices were announced for the first time. Cups at the US Agency for International Development have also led to hundreds of job losses.

Clothing exports are about a tenth of $ 2 billion from Lesotho dollars, but the current turmoil has already damaged a sector with thin razor margins.

“There are massive layoffs in progress,” said Teboho Kobeli, founder of Afri Expo, one of the largest clothing producers in the country. “Unless [factories] Make other orders alongside American orders, they are completely closed. »»

The lucky ones, he said, “only finish exceptional orders that were in the pipeline. There are no new orders coming. ”

The state of disaster would allow the government to bypass standard and long bureaucratic processes and fast track plans to create thousands of jobs in construction and agriculture, said Shelile.

All the ministries have been ordered to contribute 3% of their budget in a fund of $ 22.2 million that will be used for young people and entrepreneurs’ loans intended to strengthen the private sector, he added.

The country has a 48%youth unemployment rate.

Changes in American policy in terms of countries like Lesotho “added to the injury that was already there for many years,” said Shelile.

Colette Van Der, Director General of Tulip Consulting, specializing in international trade and sustainable development, said that Lesotho only contributes about 0.02% of the total American deficit, which means that a reciprocal rate of 50% “has no sense”.

“The clothing industry is a very fragmented value chain, and a large part of this value is not really added to the Lesotho,” she added. “If the United States really wants to target [its] trade deficit, it is not the country to target. »»

The Trump administration said that she was working on a “model” he will use to negotiate agreements with African countries.

Speaking from an event of fashion buyers in Cape Town where the exporters of Lesotho presented their goods, Shelile said that current disorders on the prices had put pressure on the government to fear efforts to diversify its buyers market.

“We are driving on the South African market to sell some of the things that would go to the United States.”

But analysts have warned that diversification efforts may not provide an easy solution, especially in the continent.

“For the most part, other African countries do not consume the same products as the Americans,” said Donald Mackay, Managing Director of XA Global Trade Advisors, based in Johannesburg. “So you are not going to replace the United States with Africa.”