How U.S. tariffs triggered a jobs crisis in Lesotho, Africa’s denim hub : NPR

MASERU, Lesotho —Crowds of women, bundled up in wooly hats and mittens against the sharp winter chill, wait every morning at the gates of a garment factory in Lesotho’s capital, hoping that a few among them will be called in to work a shift.

But no-one comes out and the factory gates – which bear the name of the Taiwanese company that runs it in red Chinese lettering – remain firmly shut.

It’s one of the few factories in what used to be called “the Denim Capital of Africa” that’s still operating after U.S. President Donald Trump announced in April he was slapping the impoverished nation with the highest tariffs in the world.

Many others have been forced to close down, with buyers spooked by the 50 percent tariff announcement even though they’ve been paused, for now.

With the economy quickly unravelling the government declared a two-year national state of disaster in early July hoping to unlock funding to create jobs. But the challenge is immense and many people are already desperate.

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.”

Trade Imbalance

The U.S. leader says he imposed the tariffs in April because of a trade imbalance between the two countries. Last year, the tiny mountain Kingdom surrounded entirely by South Africa exported $237 million in goods to the US – mostly garments– while the US exported just $3 million to Lesotho.

But Lesotho’s government argues this is a sign that a key U.S. policy introduced under former President George Bush has been working exactly as intended. The African Growth and Opportunity Act (AGOA) allows some countries on the continent tariff-free access to the U.S. market.

Lesotho made the most of it, and soon Taiwanese companies were setting up factories in Maseru, producing t-shirts, sportswear and other apparel for large American brands like Levi, Wrangler and Walmart.

African leaders are nervous because Congress will be deciding on whether to renew 25-year-old AGOA in September, but Lesotho’s Trade Minister Mokhethi Shelile says it’s already basically dead.

“AGOA, in effect it’s already sort of been scrapped with the tariffs,” he told NPR in his office in an unassuming old building in Maseru’s small, dusty CBD.

“It’s good value chain and if you cut it, it will surely hit even the U.S. itself,” said the minister, adding that the trade imbalance Trump objects to is because Lesotho simply can’t afford many U.S. products.

“It was a good policy that has given livelihoods for people here and I want to believe some people are benefiting in the U.S. as well,” he said, also noting that the government recently gave Elon Musk’s Starlink satellite service a license to operate in the country.

Another factory sits across the road from the operating factory where Hlaatsane and others are queuing for work. But its now stopped operations. Manager Restselisitsoe Moshoeshoe says it mainly exported athleisure wear to Walmart. But it closed a few weeks ago and he’s had to send 2,000 workers home.

“We cannot get raw material, we cannot export…The orders have been stopped, because everybody doesn’t know what’s going to happen,” he says.

“People who were supplying us with orders were scared,” he explains, even though the tariffs were paused shortly after being announced.

Levi’s and Vetkoek

Across town it’s lunchtime at the Levi’s factory.
Workers come out and eat their lunch under the clear blue skies, surrounded on all sides by mountains, some snowcapped. Mpolai Sementhe, tucking into a lunchbox of pap, a mealie meal staple food, has sewn the quintessential American jeans for years. She’s never owned a pair though.