Lesotho Got Its Duty-Free Access Back. The Clock Is Still Running

LESOTHO · TRADE

Lesotho’s duty-free access to the United States returned on 29 July. A temporary tariff imposed in February expired that day, by law, after Congress let it lapse.

So Lesotho’s garments enter the US without duty again. But factories had already cut jobs, and the trade programme’s future needed a separate vote in Washington.

What actually happened on 29 July

Two different US trade actions are easy to confuse, so it helps to separate them. The first was a set of country-specific “reciprocal” tariffs, which hit Lesotho with a rate as high as 50 percent in 2025.

That was one of the highest rates the US applied anywhere.

The US Supreme Court ruled in February 2026 that the law used to impose those tariffs did not allow it. The White House then invoked a narrower law, Section 122, setting a flat 10 percent tariff on nearly all imports.

That law caps such a tariff at 150 days unless Congress extends it. Congress did not, so the 10 percent tariff expired automatically on 29 July, restoring Lesotho’s duty-free status under AGOA.

Goods made in Lesotho now enter the US without duty again. That restoration is real, but it is not the same as recovery.

Orders lost during the tariff period went to competing countries.

Buyers do not move production back just because a tariff lapses. Washington is also consulting on reshaping AGOA itself, including tighter eligibility rules, a process that will matter more than this one reversal.

Why one industry carries the whole economy

Garments make up roughly a fifth of GDP and are Lesotho’s only export of real scale. In 2024 the country shipped about US$237.3 million of textiles to the United States.

The sector employed more than 30,000 people, most of them women, making manufacturing the country’s largest employer after government. In an economy this concentrated, a trade decision in Washington becomes a jobs decision in Maseru.

That concentration is Lesotho’s oldest problem. It was built on preferential access to the US market, and it was never diversified away from.

The result is an exposure no domestic policy can hedge. A change in US trade law can decide whether the country’s largest private employer stays competitive.

AGOA itself has now moved forward

AGOA’s future had been uncertain for two years. The programme actually expired on 30 September 2025, and Congress only restored it retroactively in February 2026.

In August 2026 the US Senate voted 90 to 6 to extend the programme further, to the end of 2028.

The bill then needed the House of Representatives to agree. On 1 September the House passed the same extension, attached to a government funding bill, and it now awaits the president’s signature.

That still is not the end of the story. Washington is separately reviewing AGOA’s rules, including eligibility and a stronger push for reciprocal trade terms from African members.

For Lesotho those are not technical details. Eligibility rules written with larger, more diversified economies in mind land very differently on a country that depends on one export.

A state of disaster older than the tariffs

Lesotho declared a national state of disaster over unemployment in July 2025. A labour survey had put joblessness above 30 percent, and near 40 percent among the young.

The tariff episode compounded a crisis that was already running.

Remittances have historically cushioned the country, sent home by Basotho working in South African mines and households. That cushion has thinned for years as South African mining employment falls.

The result is a country where two traditional income sources, migrant labour and preferential trade, have both been under pressure at once. Neither was ever fully under Maseru’s control.

The water revenue nobody can tariff

One export is untouched by any US decision. The Lesotho Highlands Water Project sells water to South Africa’s Gauteng province.

It earns Lesotho almost 4 billion rand, about US$240 million, each year, roughly 15 percent of the government’s budget. That figure is rising as a second phase of the project comes online.

Royalties are contractual and predictable, unlike a tariff schedule set in Washington.

The kingdom has also linked new power and data infrastructure to that water. A US$6.2 billion hydropower and data-centre project called Kobong, approved in August 2026, aims to turn the water into a second export.

Water royalties will not replace 30,000 garment jobs on their own. But they are the one line on Lesotho’s export ledger that grows without anyone else’s permission.

The same highland dams have also created a smaller export: trout. Fish farms in the cold, clear reservoirs now send sushi-grade trout as far as Japan.

What to watch next

The first thing to watch is order books, not tariff schedules. Whether foreign buyers return in the autumn sourcing round is the real measure of the reversal.

The second is the president’s signature on the AGOA extension, plus the eligibility rules still being negotiated in Washington. The third is the Lesotho Highlands Water royalties, which determine how much room Maseru has while it waits.

Frequently Asked Questions

Does Lesotho still have duty-free access to the United States?

Yes. A temporary 10 percent tariff expired automatically on 29 July, once Congress did not extend it, restoring duty-free entry under AGOA.

How important is the garment sector to Lesotho?

Garments account for roughly a fifth of GDP and are the country’s only significant export. The sector employed more than 30,000 workers, most of them women.

How much does Lesotho export to the United States?

Lesotho exported about US$237.3 million in textiles to the United States in 2024. Manufacturing is the country’s largest employer after government.

Has AGOA been renewed?

Congress has now voted to extend it. The Senate approved an extension to the end of 2028 in August.

The House passed the same bill on 1 September, sending it to the president.

What other revenue does Lesotho have?

The Lesotho Highlands Water Project sells water to South Africa’s Gauteng province. It earns Lesotho almost 4 billion rand, about US$240 million, each year.

Connected Coverage

The Senate voted to extend AGOA to 2028. That covers the legislative side.

Lesotho plans to turn water into power and data. That is its attempt to build a second export.

Both sit inside the wider contest we track in Africa: The New Scramble.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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