Lesotho's reliance on the United States has left the country on the brink of disaster following the Trump administration's decision to cut off aid. Its manufacturing sector too is under threat, thanks to uncertainty around the renewal of the African Growth and Opportunity Act.
Lesotho has declared a national state of disaster for the next two years, amid the fallout from tariffs and aid cuts imposed by the US.
With unemployment already around 30 percent, the government is warning of an additional 40,000 job losses in the textile sector if the US African Growth and Opportunity Act (AGOA) is not renewed by the end of September.
AGOA gave preferential access for African goods to the US markets, under certain conditions. Lesotho was one of its biggest beneficiaries, exporting textiles to the US.
In April, US President Donald Trump announced 50 percent tariffs – higher than any country – on goods from Lesotho. The tariffs have since been paused and a flat 10 percent rate is currently being applied to most countries.
Oscar van Heerden, senior research fellow at the Centre for African Diplomacy and Leadership at the University of Johannesburg, told RFI that the Trump administration is weaponising trade through its use of tariffs.
"Trump doesn't care about the consequences for Lesotho. What he wants is a good deal for the United States and to recalibrate what he considers to be trade deficits for the US," he said. "There is clearly something – but we don't know what – he wants from Lesotho and that’s why he has slapped it with such a high tariff. The 50 percent tariffs makes no sense."
Van Heerden called the policies adopted by the Trump administration a step back into colonial times.
"The Trump administration with the weaponisation of tariffs are taking us back to the master-servant colonial era, where the weak must suffer and the strong will decide. That’s precisely what is happening with Lesotho," he said.
He added that Lesotho must think outside the box. The country's Prime Minister Sam Matekane said in June that the solution for unemployment lies in intensive labour and sectoral transformation.
"We are not only investing in traditional sectors but also embracing innovation and creativity. We aim to empower mostly women and young Basotho with meaningful jobs and entrepreneurial opportunities," Matekane said.
Finance minister Retselisitsoe Matlanyane described youth unemployment as a "significant" challenge for Lesotho. According to a coalition of youth organisations, 48.8 percent of young people in the country cannot find a job.
According to Van Heerden, the US administration – through Secretary of State Marco Rubio and Defence Secretary Pete Hegseth – has made it clear that it is not interested in AGOA.
"There's no way that AGOA is going to be renewed," he said. "The Trump administration is talking with a forked tongue. It gives the impression that there is room for negotiation, but the truth is they've made up their mind.
"They will negotiate with countries in Africa where they can benefit in terms of critical, strategic minerals and other sectors of interest to them. They're not really interested in doing business with Lesotho."
He added that it will be an uphill battle for the Lesotho government.
"I suspect they are going to turn to SACU [the Southern African Customs Union] and the Southern African Development Community (SADC) for loans and bailouts, and where that fails, they will have to turn to the International Monetary Fund (IMF) to try and recover some funds, if indeed they have some collateral to bargain with in order to secure loans."
The abolition of USAID programmes to Lesotho, including the crucial Emergency Plan for AIDS Relief, combined with the unemployment crisis, has compounded the risk of violence among young people, according to Van Heerden.
"There is potential for the pot to explode, given the level of dissatisfaction among the population. And that's why I think in preparation for any eventuality, the Lesotho government decided to declare a state of emergency to handle this situation.
"It is trying to keep the [heat] contained for now, if it is at all possible, while at the same time looking at alternatives, in terms of loans and markets."
In July last year, Lesotho declared a state of National Food Insecurity Disaster after a historic drought triggered by El Niño led to the lowest crop yields since the 2018-19 agricultural season.