Online Reporter
Lesotho is at risk of a liquidity crisis if US President Donald Trump follows through on plans to impose a 50 percent levy on imports from the tiny southern African mountain kingdom, its trade minister warned.
Trump announced this month he’ll apply tariffs of at least 10 percent on most goods coming into America, with even higher duties on some 60 nations, to counter trade imbalances.
Lesotho was hit with the highest levies on the continent before Trump paused the additional duties for 90 days.
Should the higher tariff regime be implemented, it will place 12 000 direct jobs and 40 000 indirect jobs on the line in Lesotho, erode its foreign reserves and limit its ability to pay for imported electricity and hire construction equipment, Trade Minister Mokhethi Shelile said in an interview with Bloomberg TV on Wednesday.
“We will be terribly affected,” he said. “We are going to have liquidity issues in terms of foreign currency.”
Lesotho would be “comfortable” with the US retaining the 10 percent levy because its competitors would be equally affected and American consumers would pick up the cost, the minister said.
Negotiations about the tariffs are ongoing, and Lesotho has been asked to make officials available for talks with an American regional director who is scheduled to visit Pretoria in South Africa next week.
“We are scrambling for a solution that can work quite quickly. Normally when these types of things happen, they happen over time, but this is an overnight thing,” Shelile said. – Bloomberg
