Thursday brought terrible news for Lesotho clothing makers. They learned America would charge a huge 50% tax on everything they sell there. Teboho Kobeli runs a factory with 2,000 workers and feels absolutely crushed. His company makes clothes for big US stores, but these new taxes mean his products will cost much more for Americans to buy.
Lesotho became a success story thanks to a special deal called the African Growth and Opportunity Act. This 25-year plan let African countries sell certain things to America without paying any taxes. The idea was to build factories across Africa instead of just sending money as aid. The program created many jobs, especially for people making clothes.
Trump never mentioned the name of this program when he announced his big tax plan on Wednesday. Nobody knows what will happen next, which confuses everyone. Some African countries face smaller taxes, like 10%, while others face bigger ones, like South Africa's at 31%. Lesotho got hit hardest, at 50%.
South African leaders think this kills the special trade program completely. They said these new taxes cancel out all the benefits African countries enjoyed before. Kenya sees things differently and hopes the law stays alive until late 2025. Kenya tries to stay positive because their 10% tax looks better compared to other Asian countries making clothes.
The trade program needed to be renewed again this year. Most people believe Trump just ended any chance of that happening. This Clinton-era law has allowed African countries to sell items like clothes, cocoa, wine, and oil to America tax-free since 2000. To join, countries had to follow rules about free markets, human rights, and democracy.
Last year, trade under this program reached $47.5 billion. America sold $18.2 billion worth of stuff and bought $29.3 billion from Africa. South Africa and Nigeria did the most business, but small Lesotho really thrived by making clothes for brands like Walmart, GAP, and Old Navy.
Life without this program creates huge problems for Lesotho. One expert called the 50% tax a death sentence for factories there. The World Bank studied what might happen and found it would hurt their economy badly within two years. The impact on regular people would be dramatic, according to their report.
Countries with smaller 10% taxes might survive by finding ways to share the cost between sellers and buyers. One expert who helped create these trade deals feels sad seeing years of careful work fall apart. He believes these agreements have become victims of American politics rather than economic sense.
Michelle Gavin from a major research group says these new taxes make zero sense to economists. She sees no clear plan or strategy from the Trump team. The changes will reduce American influence across Africa and help China gain even more power as the biggest trading partner on the continent.
This comes right after America cut back its development aid programs that helped with food and medicine. Experts say the US seems intent on destroying its ways to influence Africa. The trade program once had support from both political parties as a way to counter Chinese and Russian influence.
A bill to extend the program until 2041 was proposed last year but might not pass the current Congress. Experts doubt this type of one-sided trade deal can succeed with Republicans in control who back the president. The needs of African countries will likely be ignored as Trump creates trade chaos worldwide.
If the program dies, Africa will need to work harder on its plans for free trade between African countries. They must find new markets or expand existing ones since America no longer seems interested in being a reliable trading partner.
Lesotho became a success story thanks to a special deal called the African Growth and Opportunity Act. This 25-year plan let African countries sell certain things to America without paying any taxes. The idea was to build factories across Africa instead of just sending money as aid. The program created many jobs, especially for people making clothes.
Trump never mentioned the name of this program when he announced his big tax plan on Wednesday. Nobody knows what will happen next, which confuses everyone. Some African countries face smaller taxes, like 10%, while others face bigger ones, like South Africa's at 31%. Lesotho got hit hardest, at 50%.
South African leaders think this kills the special trade program completely. They said these new taxes cancel out all the benefits African countries enjoyed before. Kenya sees things differently and hopes the law stays alive until late 2025. Kenya tries to stay positive because their 10% tax looks better compared to other Asian countries making clothes.
The trade program needed to be renewed again this year. Most people believe Trump just ended any chance of that happening. This Clinton-era law has allowed African countries to sell items like clothes, cocoa, wine, and oil to America tax-free since 2000. To join, countries had to follow rules about free markets, human rights, and democracy.
Last year, trade under this program reached $47.5 billion. America sold $18.2 billion worth of stuff and bought $29.3 billion from Africa. South Africa and Nigeria did the most business, but small Lesotho really thrived by making clothes for brands like Walmart, GAP, and Old Navy.
Life without this program creates huge problems for Lesotho. One expert called the 50% tax a death sentence for factories there. The World Bank studied what might happen and found it would hurt their economy badly within two years. The impact on regular people would be dramatic, according to their report.
Countries with smaller 10% taxes might survive by finding ways to share the cost between sellers and buyers. One expert who helped create these trade deals feels sad seeing years of careful work fall apart. He believes these agreements have become victims of American politics rather than economic sense.
Michelle Gavin from a major research group says these new taxes make zero sense to economists. She sees no clear plan or strategy from the Trump team. The changes will reduce American influence across Africa and help China gain even more power as the biggest trading partner on the continent.
This comes right after America cut back its development aid programs that helped with food and medicine. Experts say the US seems intent on destroying its ways to influence Africa. The trade program once had support from both political parties as a way to counter Chinese and Russian influence.
A bill to extend the program until 2041 was proposed last year but might not pass the current Congress. Experts doubt this type of one-sided trade deal can succeed with Republicans in control who back the president. The needs of African countries will likely be ignored as Trump creates trade chaos worldwide.
If the program dies, Africa will need to work harder on its plans for free trade between African countries. They must find new markets or expand existing ones since America no longer seems interested in being a reliable trading partner.
