Madagascar’s textile industry is threatened by a new 47% US tariff, risking 60,000 jobs. The sector employs 180,000 and contributes 20% of GDP. The government seeks dialogues with the US and coordinates actions with other affected African nations.
Madagascar is facing a daunting economic challenge as new tariffs imposed by the United States could potentially put 60,000 jobs at risk in the island nation’s textile sector. Specifically, a staggering 47 percent tariff rate has been levied by the US. This is particularly impactful for low-income countries like Madagascar, which, despite importing fewer US goods, now confronts significantly higher tax rates on exports.
The textile and clothing industry is a vital component of Madagascar’s economy, supporting around 180,000 jobs and generating nearly 20 percent of the national GDP. Exports to the US hit approximately $733 million in 2024, aided by the African Growth and Opportunity Act (AGOA) that previously allowed many African products to enter the US market duty-free.
Rindra Andriamahefa, who leads a prominent industry lobby organization, has expressed serious concern regarding the situation. He indicated that, “We estimate that around 60,000 jobs will be affected by the decision to raise tariffs to 47 percent.” His remarks underline that both permanent and temporary jobs could be lost due to these new economic pressures.
The implications of these tariffs could be disastrous for many workers, threatening not only their jobs but the overall economic stability of Madagascar. Beatrice Chan Ching Yiu, president of the Groupement des Entreprises Franches et Partenaires (GEFP), emphasized the risks of losing investors to countries where tariffs are comparatively lower. “The pandemic was one thing. What we are facing now is quite another,” she stated, underscoring the severity of the situation.
As the economic climate worsens, temporary layoffs or job dismissals could become unavoidable for some companies. In response to the looming crisis, Madagascar’s government is rolling out consultations with other African nations that are similarly affected by the tariffs, striving to forge a united front.
Additionally, communication with US authorities is ongoing, with the foreign affairs ministry stating that efforts are being made to engage in bilateral dialogue. This includes technical discussions that aim to dissect the rationale behind the steep tariff hike, emphasizing a need to understand the implications of these trade policies on their economies.
In summary, Madagascar’s textile sector is bracing for major repercussions due to the US’s new 47 percent tariffs, with up to 60,000 jobs at risk. This could significantly undermine the nation’s economic stability, given the sector’s critical role in job creation and GDP contribution. While conversations with US officials are ongoing, the country faces a difficult landscape ahead, gathering support from regional partners to combat the situation.
Original Source: au.news.yahoo.com
