PREVIEW
Facing penalties on its exports of vanilla and textiles Madagascar could lose 2% of its GDP this year
One of the world’s weakest economies, with a GDP per capita of US$509 a year, Madagascar was threatened with a 47% tariff on goods exports to the United States – one of the highest rate for any African country along with Lesotho. It will benefit from the 90-day pause on the tariffs announced by US President Donald Trump on 9 April (Dispatches, 7/4/25, Legal battles loom over Trump’s Africa tariffs). Like all other countries bar China, Madagascar will face a flat 10% duty on all exports to the US in the interim.
African textiles industries will still be among the worst affected by US tariffs. Madagascar faces losing 60,000 of its 180,000 textiles and clothing sector jobs, says Rindra Andriamahefa, the executive director of an industry lobby group. The sector accounts for around one-fifth of the country's GDP, according to a 2023 report by the International Labour Organization.
Kenya, meanwhile, exports around $500 million worth of clothes to the US each year, also previously tariff and quota free under the African Growth and Opportunity Act which has effectively been nullified by the Trump tariffs (AC Vol 61 No 17, Trading favours).
Rebeca Grynspan, Secretary-General of UN Trade and Development, has noted that in 2024 the world’s poorest 44 countries, which includes Madagascar, contributed just 1.6% of the US trade deficit.
Trump administration officials say that over 70 countries have contacted the White House since the tariff announcements offering improved trade terms to the US. Some, like the European Union and the United Kingdom, are set to offer zero tariffs on goods. Grynspan says that Washington will prioritise trade deals with major economies, leaving all but a handful of African countries at the back of the queue.
‘A constructive bilateral dialogue with U.S. authorities is underway, including technical discussions aimed at understanding the rationale behind the decision,’ the Madagascan Ministry of Foreign Affairs said in a statement.
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