Lesotho: Relief for Lesotho As U.S. Tariffs Expire
Lesotho’s exports have regained duty-free entry into the United States following the expiration of U.S. tariffs on 29 July, delivering much-needed relief to the country’s export-led garment sector and the thousands of workers whose livelihoods were at risk.
According to the Ministry of Trade, Industry and Business Development, the lapse of 122 tariffs imposed in February 2026 restores Lesotho’s preferential access under the African Growth and Opportunity Act (AGOA). This effectively returns eligible exports to a zero-duty regime, reversing months of uncertainty for manufacturers and buyers.
What changes now
- Textiles and apparel from Lesotho will re-enter the U.S. market duty-free.
- Fisheries products from Lesotho will also qualify for duty-free treatment.
- Lesotho was not included in the latest round of U.S. Section 301 tariffs announced on 24 July for 60 countries, preserving its preferential position.
The tariff rollercoaster began after the U.S. Supreme Court invalidated an earlier set of “reciprocal” tariffs, followed by the imposition of 122 new tariffs in early 2026. Those measures upended order books, increased costs for U.S. buyers, and strained factory cash flows across Lesotho’s largest manufacturing sector.
Impact on workers and factories
The garment industry in Lesotho employs more than 30,000 people and is a mainstay of the economy through AGOA-supported exports to the United States. During the months of heightened trade barriers, factories slowed production, some retrenched workers, and labor unions staged marches in Maseru calling for rapid government action to safeguard jobs. International financial institutions warned that prolonged tariffs could endanger tens of thousands of positions and threaten the sector’s stability.
With duty-free status restored, manufacturers expect orders to recover as price competitiveness returns. The ministry emphasized that the change should help stabilize employment, revive supply chains, and restore investor confidence—provided that market access remains predictable.
AGOA’s ticking clock
Despite the immediate reprieve, uncertainty persists because AGOA is set to expire on 31 December 2026 unless renewed. U.S. authorities are consulting stakeholders on potential updates to the program, which could include revised eligibility criteria and a stronger focus on reciprocity in trade relationships.
Lesotho is actively engaging in these consultations to secure durable access to the U.S. market. The government aims to provide long-term certainty to investors and buyers, reduce the risk of future disruptions, and support diversification along the textile and apparel value chain.
Next steps for investment and policy
To capitalize on the restored preferences, the government—working through the Lesotho National Development Corporation—is targeting expanded U.S. investment in spinning, knitting, dyeing, finishing, and logistics. The objective is to increase local value addition, improve resilience against global shocks, and shorten lead times for U.S. brands.
Diplomatic efforts are ongoing to establish a more predictable and permanent trade framework with the United States. Officials underscore that consistent market access is critical for job creation, factory modernization, and the competitiveness of Lesotho’s export base.
Outlook
The end of the tariffs removes an immediate threat to Lesotho’s garment and fisheries exporters, and it offers a path to recover lost orders and employment. However, with AGOA’s sunset date approaching, the country’s long-term gains will depend on successful program renewal or an alternative framework that preserves duty-free access. For now, factories, workers, and buyers alike are set to benefit from the return to zero duties—and are looking to lock in those benefits for the years ahead.
