Madagascar’s Textile Industry Threatened by New US Tariffs

Madagascar risks losing 60,000 jobs in its textile industry amid new US tariffs of 47%. This could significantly impact the country’s economy, as the sector employs 180,000 people and contributes 20% to GDP. Stakeholders express concerns over layoffs and seek dialogue with US officials to address the crisis and its aftermath.

The textile industry in Madagascar is bracing for a major crisis, with projections indicating a possible loss of 60,000 jobs due to new tariffs imposed by the United States. The US government has enacted a staggering 47 percent tariff that places immense pressure on the nation’s economy. Low-income countries, particularly Madagascar, find themselves adversely affected as they import fewer US goods while enduring higher tax rates.

The textile and clothing sector is crucial for Madagascar, providing employment to approximately 180,000 individuals and contributing about 20% to the national GDP. In 2024 alone, the country exported around $733 million worth of textile goods to the US, a figure that relies heavily on the African Growth and Opportunity Act (AGOA). This legislation had previously allowed many African nations to enjoy duty-free access to the lucrative US market, but the revised tariffs now threaten that arrangement.

Rindra Andriamahefa, the executive director of a leading industry lobby group, expressed serious concern over the potential job losses. He stated, “We estimate that around 60,000 jobs will be affected by the decision to raise tariffs to 47 percent,” indicating that both permanent and temporary positions are at stake.

The new tariffs not only jeopardize individual livelihoods but threaten the overall economic stability of Madagascar. Beatrice Chan Ching Yiu, president of the Groupement des Entreprises Franches et Partenaires (GEFP), warned that investors might shift their focus to countries facing significantly lower tariffs, like the 10 percent minimum imposed by Trump. Ching Yiu remarked, “The pandemic was one thing. What we are facing now is quite another.”

In light of this dire situation, the possibility of temporary layoffs or dismissals is becoming starkly real. The government of Madagascar has initiated discussions with other African nations also impacted by these tariffs in order to develop a cohesive response.

As stated by the foreign affairs ministry, a constructive bilateral dialogue with US officials is currently underway, including technical discussions aimed at shedding light on the reasons behind the tariff hikes. This dialogue is seen as crucial for formulating a strategy to mitigate the impending crisis and protect the nation’s economy.

In summary, Madagascar faces a significant economic threat as new US tariffs may jeopardize up to 60,000 jobs in the textile sector. This industry, vital for the nation’s employment and GDP, is caught in a challenging position due to increased tax rates. Stakeholders are seeking dialogue with US authorities and coordinating with other affected African nations to address the potential fallout and explore solutions. The future remains uncertain as the nation navigates these turbulent waters.

Original Source: au.news.yahoo.com