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How Tiny Lesotho Ended up with the Highest US Tariffs in the World

Workers perfom their duties at Quantum Apparel factory on the outskirts of Maseru, the capital of Lesotho, the tiny Southern African kingdom that US President Donald Trump ridiculed last month, April 4, 2025. (Reuters)
Workers perfom their duties at Quantum Apparel factory on the outskirts of Maseru, the capital of Lesotho, the tiny Southern African kingdom that US President Donald Trump ridiculed last month, April 4, 2025. (Reuters)
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How Tiny Lesotho Ended up with the Highest US Tariffs in the World

Workers perfom their duties at Quantum Apparel factory on the outskirts of Maseru, the capital of Lesotho, the tiny Southern African kingdom that US President Donald Trump ridiculed last month, April 4, 2025. (Reuters)
Workers perfom their duties at Quantum Apparel factory on the outskirts of Maseru, the capital of Lesotho, the tiny Southern African kingdom that US President Donald Trump ridiculed last month, April 4, 2025. (Reuters)

If you have ever bought a pair of jeans from an American brand like Levi’s or Wrangler, chances are they were manufactured at a factory in the small southern African nation of Lesotho.

Textile manufacturing is one of Lesotho's key industries, exporting some 75% of its output to the United States.

This is expected to change after US President Donald Trump slapped a 50% tariff on imports from Lesotho, the highest among all countries. According to Trump, Lesotho charges a 99% tariff on US goods, but the government said it doesn't know how the US administration calculated that figure. Government officials did not say Thursday what Lesotho's tariffs on US goods are.

Here is what the high tariffs mean for Lesotho:

A country ‘nobody has ever heard of’

Trump made fun of Lesotho in a speech in March, calling it a nation that “nobody has ever heard of.” Lesotho's foreign minister reminded him that the US has a diplomatic mission there.

Last year, the landlocked kingdom bordered on all sides by South Africa with a population of 2.3 million people, celebrated 200 years of the founding of the Basotho nation and 58 years of independence from British rule.

Its picturesque scenery and mountainous views draw visitors from Africa and across the world, and during winter, Lesotho becomes one of the most sought-after skiing destinations.

What are Lesotho's exports and the economy?

Lesotho does not pay tariffs on exports to Botswana, Namibia, South Africa and Swaziland since it is a member of regional economic blocs such as the Southern African Customs Union. Main exports include clothing, diamonds, water, power, wool and mohair.

The new tariffs announced by Trump mean that American consumers will pay more for goods made in Lesotho, making them less competitive in the US market.

According to the Office of the US Trade Representative, in 2024, US-Lesotho bilateral trade stood at $240.1 million. Apart from clothing, Lesotho's exports also include diamonds and other goods.

Classified as a lower-middle income country by the World Bank, nearly half of Lesotho's 2.3 million population live below the poverty line, while a quarter are unemployed.

How has Lesotho reacted to tariffs?

Lesotho’s Trade Minister Mokhethi Shelile said his country will be on the prowl for new markets and use the Africa Continental Free Trade Area to increase exports to favorable destinations in Africa.

The government would also urgently send a delegation to the US to negotiate a workable arrangement. Shelile said he's concerned about the possible closure of textile factories, which employ about 12,000 people in Lesotho.

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Asia Shares Jump after US Stocks Soared to Historic Gains When Trump Paused Most of His Tariffs

A screen displays a trading chart on the New York Stock Exchange (NYSE) in New York City after the White House announced a 90-day pause & lowered 10% reciprocal tariff for other countries, US, April 9, 2025. REUTERS/Brendan McDermid
A screen displays a trading chart on the New York Stock Exchange (NYSE) in New York City after the White House announced a 90-day pause & lowered 10% reciprocal tariff for other countries, US, April 9, 2025. REUTERS/Brendan McDermid
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Asia Shares Jump after US Stocks Soared to Historic Gains When Trump Paused Most of His Tariffs

A screen displays a trading chart on the New York Stock Exchange (NYSE) in New York City after the White House announced a 90-day pause & lowered 10% reciprocal tariff for other countries, US, April 9, 2025. REUTERS/Brendan McDermid
A screen displays a trading chart on the New York Stock Exchange (NYSE) in New York City after the White House announced a 90-day pause & lowered 10% reciprocal tariff for other countries, US, April 9, 2025. REUTERS/Brendan McDermid

World markets soared on Thursday, with Japan’s benchmark jumping more than 9%, as investors welcomed US President Donald Trump’s decision to put his sharp tariff hikes on hold for 90 days, though he excluded China from the reprieve.

In early trading, Germany’s DAX initially gained more than 8%. It was up 7.5% at 21,141.53 a bit later, while the CAC 40 in Paris gained 7.2% to 7,360.23. Britain's FTSE 100 surged 5.4% to 8,090.02.

However, US futures edged lower and oil prices also declined. Chinese shares saw more moderate gains, given yet another jump in the tariffs each side is imposing on each others’ exports.

The future for the S&P 500 was down 0.4% while that for the Dow Jones Industrial Average edged 0.2% lower.

Analysts had expected the global comeback given that US stocks had one of their best days in history on Wednesday as investors registered their relief over Trump’s decision.

On Thursday, Japan’s benchmark Nikkei 225 jumped 9.1% to finish at 34,609.00, zooming upward as soon as trading began.

Australia’s S&P/ASX 200 soared 4.5% to 7,709.60. South Korea’s Kospi gained 6.6% to 2,445.06. Hong Kong's Hang Seng added 2.4% to 20,750.65. The Shanghai Composite rose 1.2% to 3,223.64.

Investors went “from fear to euphoria,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary.

“It’s now a manageable risk, especially as global recession tail bets get unwound, and most of Asia’s exporters breathe a massive sigh of relief,” he said, referring to the tariffs on China, which Trump has kept.

On Wall Street, the S&P 500 surged 9.5%, an amount that would count as a good year for the market. It had been sinking earlier in the day on worries that Trump’s trade war could drag the global economy into a recession. But then came the words investors worldwide had been waiting and wishing for.

“I have authorized a 90 day PAUSE,” Trump said, saying more than 75 countries are negotiating on trade and not retaliating against his latest increases in tariffs.

Treasury Secretary Scott Bessent later told reporters that Trump was pausing his so-called ‘reciprocal’ tariffs on most of the country’s biggest trading partners, but maintaining his 10% tariff on nearly all global imports.

China was a huge exception, though, with Trump saying tariffs are going up to 125% against its products. The trade war is not over, and an escalating battle between the world’s two largest economies can create plenty of damage.

US stocks are also still below where they were just a week ago, when Trump announced worldwide tariffs on what he called “Liberation Day.”

But on Wednesday, at least, the focus on Wall Street was on the positive. The Dow Jones Industrial Average shot to a gain of 2,962 points, or 7.9%. The Nasdaq composite leaped 12.2%. The S&P 500 had its third-best day since 1940.

The relief came after doubts had crept in about whether Trump cared about the financial pain the US stock market was taking because of his tariffs. The S&P 500, the index that sits at the center of many 401(k) accounts, came into the day nearly 19% below its record set less than two months ago.

That surprised many professional investors who had long thought that a president who used to crow about records for the Dow under his watch would pull back on policies if they sent markets reeling.

Wednesday’s rally pulled the S&P 500 index away from the edge of what’s called a “bear market.” That’s what professionals call it when a run-of-the-mill drop of 10% for US stocks, which happens every year or so, graduates into a more vicious fall of 20%. The index is now down 11.2% from its record.

Wall Street also got a boost from a relatively smooth auction of US Treasurys on Wednesday. Earlier jumps in Treasury yields had rattled the market, indicating increasing levels of stress. Trump said he had been watching the bond market “getting a little queasy.”

Higher yields on Treasurys put pressure on the stock market and push upward on rates for mortgages and other loans for US households and businesses.

US Treasury yields historically have dropped — not risen — during scary times for the market because the bonds are usually seen as some of the safest possible investments. This week’s sharp rise had brought the yield on the 10-year Treasury back to where it was in late February.

After approaching 4.50% in the morning, the 10-year yield pulled back to 4.34% following Trump’s pause and the Treasury’s auction. That’s still up from 4.26% late Tuesday and from just 4.01% at the end of last week.

In energy trading, benchmark US crude fell 81 cents to $61.54 a barrel. Brent crude, the international standard, declined 93 cents to $64.55 a barrel.

In currency trading, the US dollar fell to 146.77 Japanese yen from 147.38 yen. The euro cost $1.0986, up from $1.0954.