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Comment by thih9 | Hacker News Reader

Does anyone here know what is the impact of this for Lesotho in practice?

I found an article[1] but perhaps someone here knows more or is there in person.

> Lesotho exported $237m of goods last year to the US and imported $2.8m. Agoa[2], which has allowed tariff-free access to the US market for thousands of product types since 2000, created a thriving garment industry, accounting for about 20% of GDP.

> There are about 30,000 garment workers in Lesotho, mostly women, with 12,000 making clothes for US brands including Levi’s, Calvin Klein and Walmart in Chinese- and Taiwanese-owned factories.

> “(…) If we lose our jobs here, I’m almost certain that many of us will end up sleeping on empty stomachs.”

[1]: https://www.theguardian.com/global-development/2025/apr/04/l...

[2]: https://en.wikipedia.org/wiki/African_Growth_and_Opportunity...

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I want the people who work to make the things I use to earn more than $150 per month.

A sane tariff policy would be set up to penalize these very low wage exporters to give competitive advantage to exporters and local producers with higher wages but also to incentivize higher wages in a way that set rates make producers more profitable if they paid workers more (and likewise other human development and environmental etc issues)

Well, this gets closer. There used to be a garment industry in the USA...

> There used to be a garment industry in the USA...

Yeah, but the last large piece of it (there are still some amall remnants) got wiped out with the most recent push for eliminating large scale non-penal slavery in the US.

And, no, I don’t mean abolishing formal chattel slavery with the 13th Amendment, I mean the push to eliminate the informal de facto slavery that persisted in the US territory of the Confederation of the Northern Mariana Islands around the turn of the millenium.

There still is, just small. I quite like my American Giant tshirts for example.

I don’t see how tariffs magically create wealth for foreign exporters that translates into higher wages. Let’s say I can buy a $10 shirt from Lesotho with zero tariff. Now a 50% tariff gets imposed. I can either eat the tariff and pay $15, in which case Lesotho still gets their $10, or Lesotho can eat the tariff to keep their exports competitive, in which case Lesotho now makes $5.

The part about giving a competitive advantage to local producers is true, though…

Such a tarrif on low wage countries would prevent the exploitation of low wage countries. Because any county could easily 'defeat' the tarrif by setting a minimum wage. It doesn't help raise the people being exploited out of poverty. But it does prevent countries from getting stuck in a cycle of depending on low wage labor.

Whether that works out better for the exploited is uncertain. But the alternative argument is effectively "these poor countries should be happy to let themselves be exploited" it is their only way out of poverty. And that really doesn't sit right with me.

for countries that pay a worker $10 a day, put a tariff on the goods produced by that worker to total $10

for countries that pay a worker $15 dollars a day put a tariff on the goods produced by that work to total $4

therefore someone importing goods produced by one worker in one day from the lower wage country would spend $20 for the goods from the lower wage country but only $19 for the goods for the higher wage country giving a competitive advantage for higher wages

obviously that is a simplistic example but that's what i mean using tariffs to incentivize better behavior and level the playing field so the most exploitation doesn't make the most money

That’s a nice idea, but I’m skeptical—where is the new wealth coming from that will allow Lesotho to pay its workers more? It’s not an issue of strong-arming some bad guys in Lesotho to pay their workers more using tariffs as a negotiation tool.

I feel that conflating tariffs with some sort of negotiation tool to bring about positive global change is disingenuous, because the real aim is clearly protectionism.

It's coming from the people who buy the exported goods.

This would mean, of course, that the people who happen to work for an export-oriented factory become much more wealthy than most people in Lesotho. So you might reasonably wonder whether it's better to make twice as many workers half as wealthy. Labor advocates believe the answer is no: paying some people genuinely good wages both creates and encourages further development, while paying a larger number of people "good enough" wages encourages poor countries to race to the bottom competing for the lowest standard of "good enough".

It's clearly not protectionism, because you wouldn't put tariffs on everything - including all the raw materials and parts you need to import, if you wanted your local industries to succeed. And you'd have a coherent industrial policy to go along with it.

Protectionism is France and England putting tariffs on each others cheese. America putting tariffs on Canadian lumber.

Putting tariffs on places that have a 20x factor difference in wages is something else.

And protectionism isn't necessarily a dirty word. It's often valuable to save your local industries from being wiped out and to not have a foreign country have complete control of a necessity.

My point is only that these tariffs cannot be motivated by protectionism, since they are not targeted and will also disadvantage local industry.

If the shirt costs $10 in labor, and the pre-tariff wholesale price is also $10, how does the manufacturer make a profit? Surely the wholesale price would at least include some markup for profit? So like $10 labor + $3 markup (per employee-day) + $10 tariff ($23) contrasted with $15 labor + $3 markup + $4 tariff ($22), in your scenario.

But now you see that the low wage manufacturer has a third option, $10 labor + $1 markup + 10 tariff ($21), which would maintain their competitive advantage and in this scenario only cut their daily per employee profit by $2, as opposed to the $5 hit they would suffer by raising their employee wages to $15 day from $10.

That's not really what I mean.

What I'm saying is set a minimum wage on imports. Set a global minimum wage. Anyone importing something from somewhere that doesn't meet that minimum wage would have to pay a tariff greater than the amount saved with low wages.

The goal is to increase competition and improve fairness between locations. You wouldn't want to do it all at once at first, rather a gradual increase. You wouldn't want to distort the local economy too much so don't insist somewhere pay 10x the median local wage. Lots of things you would do which are more complex with an eye for fairness and competitiveness and definitely not trying to raise everyone by force to American levels of wages, but always measured amounts of pressure.

These suggestions are... not based in reality. Lesotho has a GDP per capita of something like $1000 per year.

How do you expect them to magic higher salaries?

Maybe the $5 per garment could go to USAid, and fund care programmes in those countries.

A truely laughable suggestion.

This makes sense. I think even MAGA might agree if you pitch it as "we use tarrifs to prevent American labor from being undercut.

But it is clear that the reasoning here is "I want tarrifs, how do I easily get them". And then they found the easiest possible way to say something about 'countries putting a tarrif on the US'.

The stupid theory behind this is effectively: not having a minimum wage is equivalent to putting a tarrif on the US. Which would suggest that the low US minimum wage is actually already a tarrif on the EU.

Pressure to improve trade imbalances is a good idea! Particularly with China and some of these extremely low wage countries. Democrats being silent on the topic or not wanting to do anything about it is one of the bigger deciding issues for the kind of moderates who would actually change their vote between parties.

The current administration is like... if you're being charitable you can imagine at some point someone had a reasonable set of ideas that got filtered through a long string of fools in a game of telephone so now we have an angry toddler with a gun destroying the global economy on the basis of ideas which very well may have been interesting at the beginning of the chain but have long since descended into incoherence.

"incentivize higher wages in a way that set rates make producers more profitable if they paid workers more"

That sounds amazing..how would that work?

You can just put in the trade agreement that the goods are subject to tariffs unless the workers who made them are paid enough. The USMCA, for example, has requirements along these lines for auto assembly (https://www.dol.gov/agencies/whd/usmca).

What you're advocating for is these 30.000 people to lose their jobs, not earn anything and starve.

How does that help them? Oh, right. You don't care about them, actually. You just have this vague ideal that people should earn more money. Maybe not even that. You just want tariffs for some inexplicable reason. Because tariffs cannot give these people higher salaries. That's not how any of this works.

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