Lesotho’s textile and garment sector long considered a cornerstone of its export economy and a vital source of employment, has recently faced intensified disruption following tariff measures imposed by the United States. In April 2025, a proposed 50% import duty on Lesotho’s textile exports to the U.S. sent shockwaves through the industry. Although the tariff has since been reduced to 15%, it remains higher than those levied on key competitor countries, including Kenya, which benefits from a preferential 10% rate.
This article critically analyses the implications of these trade developments through the lens of labour law, examining the compliance duties of employers under the Labour Act of Lesotho, the limitations of existing international trade frameworks, and the socio-economic fallout facing the nation’s most vulnerable workers.
Lesotho’s Vulnerability in the Global Trade Architecture
Lesotho’s access to the U.S. market has historically been anchored in the African Growth and Opportunity Act (AGOA), a unilateral trade preference scheme that allows eligible African countries to export qualifying products duty-free to the U.S. market. Lesotho’s textile sector has relied heavily on AGOA, supplying international brands such as Levi’s, Wrangler, Walmart, and JCPenney.
In 2024 alone, bilateral trade between Lesotho and the U.S. was valued at over $240 million, with apparel accounting for the majority of exports. However, AGOA’s non-reciprocal structure and political volatility render it an unstable foundation for industrial growth. The abrupt imposition of the 50% tariff, though now scaled back, highlights the precarity of Lesotho’s trade-dependent economy.
Employment Law Implications Under the Labour Act
The immediate consequence of the tariff uncertainty has been a sharp contraction in factory output, triggering retrenchments and indefinite closures. A major garment factory has reportedly halted operations and placed the majority of its 1,300 workers on unpaid leave.
Such developments invoke direct obligations under the Labour Act 2024, which governs employment relationships in Lesotho and sets out the procedures for termination based on operational requirements. Employers contemplating retrenchment must:
- Initiate consultations with affected employees or their representatives;
- Provide advance written notice outlining the rationale for dismissal;
- Explore and document alternatives to job losses;
- Follow a procedurally fair process prior to termination.
Where these statutory obligations are not observed, any resulting dismissal may be deemed unfair, exposing employers to claims for reinstatement or compensation. The failure to provide severance benefits or proper notice may also result in additional liability.
Given the concentration of women in Lesotho’s garment workforce, many of whom are sole breadwinners, non-compliant retrenchments not only contravene the Labour Act but also perpetuate structural inequality and economic insecurity.
Government Engagement and Strategic Challenges
Lesotho’s Minister of Trade, Industry and Business Development has acknowledged that, despite recent diplomatic efforts, the 15% tariff remains economically unsustainable. The Ministry has engaged with U.S. representatives and the U.S. Embassy to advocate for parity with countries enjoying a 10% rate.
The government’s challenge lies in simultaneously securing improved access to export markets while ensuring that employers remain compliant with domestic labour laws during economic downturns. Temporary concessions on tariffs do not negate employers’ obligations under the Labour Act to protect workers’ rights during business restructuring or closure.
Regional Repercussions and Interconnected Risks
The impact of U.S. trade policy is not confined to Lesotho. South Africa, Lesotho’s primary trading partner within the Southern African Customs Union (SACU) has been similarly affected by reciprocal tariffs, with a 30% duty imposed on certain agricultural and manufactured exports. These developments may further reduce SACU revenue transfers to Lesotho, tightening fiscal constraints and hampering its ability to provide social protection to retrenched workers.
Legal and Policy Recommendations
From a labour law and trade governance perspective, the following reforms are recommended:
- Strengthen enforcement of the Labour Act by ensuring employers comply with retrenchment procedures during economic downturns.
- Introduce regulatory mechanisms to provide transitional relief (e.g., wage subsidies or emergency unemployment assistance) for workers affected by global trade shocks.
- Develop a national industrial policy aimed at market diversification beyond the U.S. to reduce over-dependence on a single trade partner.
- Pursue regional integration strategies that leverage SACU and African Continental Free Trade Area (AfCFTA) benefits for textile exports.
Conclusion
Lesotho’s tariff reprieve from the United States, though politically significant, offers only temporary relief to an industry already under duress. The legal implications extend beyond trade diplomacy, revealing gaps in industrial resilience and labour protection.
The onus lies on both the state and employers to ensure that workers’ rights are not sidelined in the face of global market volatility. As the Labour Act now governs retrenchment and restructuring processes, non-compliance is not only unlawful but carries substantial socio-economic risks. In the absence of structural reforms, the gains achieved under AGOA could unravel at great cost to Lesotho’s workforce.