Madagascar is facing a significant economic challenge due to the recent decision by the United States under President Donald Trump to impose a 47% tariff on the country, particularly affecting its textile sector. The new tariffs, calculated based on a formula that penalizes low-income countries importing few U.S. goods, have hit Madagascar hard. This is especially critical since the textile and clothing sector employs around 180,000 people and contributes roughly 20% to Madagascar’s GDP.
According to reports, the increase in tariffs could lead to the loss of approximately 60,000 jobs in Madagascar’s textile industry, both permanent and temporary. This sector is a major source of income for the country, and the tariff hike places a heavy burden on workers and businesses alike. The group representing the industry, the Groupement des Entreprises Franches et Partenaires (GEFP), warned that investors may move to countries with less severe tariffs, such as those facing the minimum 10% tariff under the new policy.
This situation is exacerbated by the ongoing economic recovery from the pandemic, with some businesses predicting they may be forced to implement temporary layoffs or dismissals. The government of Madagascar is actively engaging in bilateral discussions with the U.S. to better understand the reasoning behind the tariff increase and coordinate with other affected African countries to take a unified approach.
The tariff rise threatens to undermine one of the most important sectors of Madagascar’s economy, and the government’s efforts to negotiate with U.S. authorities could be crucial in mitigating the impact on jobs and exports.