One of the world’s poorest countries is reeling from the impact of US President Donald Trump’s tariff regime, which has crippled its key textile industry and exacerbated already high unemployment.

That’s how the historic pivot in US trade policy is unfolding in Lesotho, the landlocked, southern African mountain kingdom whose denim manufacturing has been a rare economic bright spot. Trump initially put 50% levies on imports from Lesotho, the highest in the world. Despite a cut to 15% in August, those duties still outstrip those on competitors like Kenya, and some factories have eliminated jobs as orders dried up.

“We are still in negotiations with the US government on a further reduction, maybe to 10% or to zero- where we were before,” Prime Minister Sam Matekane said in an interview with Bloomberg Television’s Wall Street Week. “The introduction of the tariffs have put us in a disadvantaged position” because businesses can relocate to countries where levies are lower, he said. 

Textiles is the biggest industry in Lesotho, a country of about 2.3 million people. Those businesses employ 12,000 people and indirectly support 40,000 jobs, supplying US retailers such as Walmart Inc., JC Penney and Levi Strauss & Co. Before the new tariffs, most of of the country’s exports to the US- its second-biggest trade partner- entered duty-free under the now-defunct African Growth and Opportunity Act. 

Before Trump took office, Lesotho’s central bank forecast modest expansion this year and next for textile and clothing manufacturing. The new outlook: contractions of 9.9% and 13.3%. Trump’s tariffs are based on countries’ trade balance with the US, and Lesotho imported less than $3 million in goods from the US last year, compared with exports of more than $235 million.

Teboho Kobeli, the founder of Lesotho-based Afri-Expo Textiles, said the tariffs came as a major shock, comparable with the coronavirus pandemic. At the very least, Trump’s targeting of the country serves as a “wake-up call” and an opportunity to change the way the economy operates. Unemployment was 30% last year, the most recent data show, ranking among the world’s highest.

“I would say ‘Thank you, President Trump, for making Lesotho known,’” he said. “For the president of a powerful country like the US to mention Lesotho in his Congress is, you know, a powerful marketing tool.”