Madagascar's textile industry is facing a significant threat due to recently imposed US tariffs, with an estimated 60,000 jobs potentially at risk. The 47 per cent tariff implemented by the US government has affected low-income countries like Madagascar, which import smaller volumes of US goods but now face some of the highest tax rates.
This poses a severe challenge to Madagascar's economy, as the textile and clothing sector employs approximately 180,000 people and contributes around 20% to the country's GDP. The sector heavily relies on exports to the US, with $733 million worth of goods shipped in 2024, largely facilitated by the African Growth and Opportunity Act (AGOA). This act previously granted duty-free access to the US market for many African-produced goods.
Rindra Andriamahefa, executive director of an industry lobby group, warned of the impending job losses, stating, "We estimate that around 60,000 jobs will be affected by the decision to raise tariffs to 47 per cent." This figure encompasses both permanent and temporary job losses.
The increased tariffs place Madagascar's textile sector in a precarious position, jeopardising the livelihoods of thousands and potentially impacting the nation's overall economic stability.
Beatrice Chan Ching Yiu, the president of the lobby group, the Groupement des Entreprises Franches et Partenaires (GEFP), said investors would turn to exporting countries which face only the minimum 10% tariff imposed by the Trump administration."The pandemic was one thing. What we are facing now is quite another," Ching Yiu said.
"Unfortunately, measures such as temporary layoffs or dismissals may prove unavoidable. Madagascar's government has begun consulting other African countries adversely affected by the tariffs to coordinate a common position."
A constructive bilateral dialogue with US authorities is underway, including technical discussions aimed at understanding the rationale behind the decision," the foreign affairs ministry said in a statement on Tuesday.
