The new tariffs pose a significant threat to the economy of Lesotho, where nearly 20% of exports are directed to the United States. Oxford Economics indicates that other African nations impacted by the announcement include Mauritius—with a 40% tariff and the U.S. accounting for about 10% of its exports—and South Africa, which faces a 30% tariff with the U.S. representing just under 10% of its exports.
The kingdom of Lesotho is expected to experience the most severe direct impact, but the repercussions on global supply chains and economic prospects for other trading partners suggest that no economy will remain unscathed. Furthermore, analysts from the African department of this British consultancy indicate that the African Growth and Opportunity Act (AGOA), set to expire in September, is effectively dead.
“The severity of the announcement caught most people by surprise, and Africa is home to some of the most heavily affected economies; Lesotho, Madagascar, and Mauritius will face some of the world’s highest reciprocal tariffs, and the United States has been a significant export destination for these countries,” warn the analysts.
Enacted in 2000, the AGOA, which benefits approximately 30 sub-Saharan African countries, must be renewed by September but appears to be in its final months due to changes in U.S. trade policy since Trump’s return to the White House. These changes also include a suspension of funding for the United States Agency for International Development (USAID), which manages an annual budget of $42.8 billion (€39.5 billion at the current exchange rate) and accounts for 42% of humanitarian aid disbursed worldwide.
On Wednesday, the President of the United States announced new American tariffs of 20% on products imported from the European Union, adding to the existing 25% tariffs on the automotive, steel, and aluminum sectors.
Trump’s new tariffs are an attempt to boost the U.S. industry while penalizing countries for what he described as years of unfair trade practices.
