Madagascar's Textile Industry Faces Crisis Amidst U.S. Tariff Hike

A 47% tariff imposed by the U.S. on Madagascar's goods could result in the loss of 60,000 textile jobs. Madagascar's textile sector, vital to the economy, is now seeking cooperation with other African nations to address the issue through dialogue with U.S. officials.

Madagascar's textile industry is on the brink of a significant crisis, with an estimated loss of around 60,000 jobs due to the recent 47% tariff imposed by U.S. President Donald Trump. This heavy tax impact comes as a blow to a country where the textile sector contributes about a fifth of the GDP and employs 180,000 people.

The tariff, calculated using a formula that disadvantages low-income countries importing small quantities of U.S. goods, has left nations like Madagascar facing disproportionately high tax rates. The country exported $733 million worth of goods to the U.S. in 2024, benefiting significantly from the African Growth and Opportunity Act (AGOA), which is now threatened by these new tariffs.

In response, Madagascar's government is engaging in consultations with other affected African countries to forge a common strategy and open bilateral discussions with U.S. authorities. Meanwhile, industry leaders predict a shift of investors to other nations facing only minimal tariffs, warning that layoffs and dismissals in the sector may be inevitable.

(With inputs from agencies.)