Madagascar’s textile industry could lose 60,000 jobs due to a new 47% U.S. tariff. This sector, vital to the economy, employs 180,000 people and contributes significantly to GDP. Concerns are raised about potential investor shifts and government measures to address the crisis are underway.
The textile industry in Madagascar is now confronted with a daunting challenge; recent tariffs imposed by the U.S. could risk up to 60,000 jobs. The hefty 47 percent tariff, part of the U.S. government’s new trade policies, predominantly impacts low-income countries like Madagascar. These nations, importing limited amounts of U.S. goods, are now unexpectedly grappling with some of the highest taxation rates in history.
This crisis poses a significant threat to Madagascar’s economy. The textile and clothing sector employs around 180,000 people and accounts for about 20 percent of the nation’s gross domestic product (GDP). A large portion of its exports is directed towards the U.S., with $733 million worth of goods shipped in 2024, primarily benefiting from the African Growth and Opportunity Act (AGOA), which has previously provided duty-free market access to many exports from the continent.
Rindra Andriamahefa, who is the executive director of a local industry lobby group, has expressed grave concerns about the potential for job losses. He stated, “We estimate that around 60,000 jobs will be affected by the decision to raise tariffs to 47 percent.” This loss tally includes both temporary and permanent positions, which could destabilize thousands of families.
The raised tariffs threaten the very fabric of Madagascar’s textile sector, endangering the livelihoods of many and placing the broader economic stability of the country at serious risk. Beatrice Chan Ching Yiu, president of the Groupement des Entreprises Franches et Partenaires (GEFP), voiced fears that investors would begin favoring countries where they face only a minimal 10 percent tariff rate set by the Trump administration. She commented, “The pandemic was one thing. What we are facing now is quite another.”
The ramifications of these tariffs may force companies into difficult positions, leading to potential layoffs or dismissals. In response, Madagascar’s government is reaching out to fellow African nations affected by these new tariffs to form a united front. A coordinated effort is essential to navigate this trade crisis and mitigate its adverse effects.
The foreign affairs ministry has also noted that constructive dialogues with U.S. authorities are in progress, involving technical discussions to comprehend the underlying reasons for these tariff increases. According to a recent statement, the government is committed to pursuing this dialogue to protect its economic interests and workforce.
In conclusion, Madagascar’s textile industry stands on the brink of significant job losses due to new U.S. tariffs. With approximately 60,000 jobs at risk, the impact on Madagascar’s economy could be devastating given the importance of this sector. The government is actively seeking to engage with both domestic stakeholders and U.S. authorities in hopes of mitigating these repercussions and exploring pathways for cooperation.
Original Source: au.news.yahoo.com
