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The Handelsminister of Lesotho has warned that the textile industry of the country, an important exporter for brands such as Levi’s and Wrangler in the US, runs the risk of folding when Donald Trump is progressing by 50 percent rates.
Mokhethi Shelile said the Financial Times that a national “state of disaster” that stated this week would enable the government to quickly follow the establishment of 60,000 jobs in other sectors for two years, because it prepares itself at the end of the break on the so -called Liberation Day rates announced in April.
“We are waiting full of excitement for the possibility that we get a good, favorable rate and that favorable rate … can only be 10 percent or less,” said Shelile. “Everything that goes further, we fear that our textile industry that exports to the United States, or will have to change to other markets or just fold up.”
Lesotho, an unexpected success story born from the 25-year-old African Growth and Opportunity Act (AGOA) of Washington that offers tariff-free access to the continent, was recently rejected by Trump as “a country that nobody has ever heard”.
The Bergkoninchrijk of 2.3 million is the largest exporter from Africa to the US, who threatened to impose a 50 percent rate in April on his export, one of the highest rates for each country.
The lively textile industry of Lesotho is the largest private employer in the country, good for around 40,000 jobs, but there have been massive fired since the rates were announced for the first time. Cutbacks on the American Bureau for International Development have also led to hundreds of job losses.
Clothing exports about a tenth of Lesotho’s $ 2 billion GDP, but the ongoing unrest has already damaged a sector with razor-thin margins.
“There are enormous fired,” said Toho Kobeli, founder of Afri Expo, one of the largest clothing producers in the country. “Unless [factories] Do other orders in addition to our orders, they close completely. ‘
The lucky ones, he said, “finishing his excellent orders that were in the pipeline. No new orders are coming in.”
The state of disaster would enable the government to bypass standard, time -consuming bureaucratic processes and plans for fast track to create thousands of jobs in construction and agriculture, Shelile said.
All ministries have been instructed to contribute 3 percent of their budget to a $ 22.2 million fund that will be used for youth fairs and entrepreneurial loans that are intended to strengthen the private sector, he added.
The country has a youth unemployment rate of 48 percent.
The shifts in American policy in terms of how things deal with countries such as Lesotho, joined the wound that has been there for many years, “said Shelile.
Colette van der Ven, Chief Executive of Tulip Consulting, which specializes in international trade and sustainable development, said that Lesotho only contributes to the total shortage of the US, which means that a 50 percent mutual rate “zero is useful”.
“The clothing industry is a very fragmented value chain and much of that value is not really added within Lesotho,” she added. “If the US really wants to target [its] Trade deficit, this is not the country to target. “
The Trump government has said it is working on a “template” that will use it to negotiate deals with African countries.
Speaking from the event of a fashion buyers in Cape Town where Lesotho exporters presented their were, Shelile said that the constant unrest about rates had put pressure on the government to diversify the buyers’ efforts.
“We enter the South African market to sell some things that would go to the US.”
But analysts warned that diversification efforts may not offer an easy solution, in particular within the continent.
“For the most part, other African countries do not consume the same products as Americans,” said Donald Mackay, CEO of the Johannesburg -based Xa Global Trade Advisors. “So you’re not going to replace the US with Africa.”
