The Southern African mountain kingdom of Lesotho has declared a national "state of disaster" over soaring unemployment and mass job losses as it reels from the economic fallout of US tariffs and aid cuts.

The textile-dependent economy was already grappling with sky-high unemployment, especially among the youth, before President Donald Trump slashed aid and raised trade barriers.

The law – which gives the government additional powers including bypassing standard procedures – will be in force for two years, according to an official government notice dated July 7.

Ministries had already been ordered to allocate 2% of their budgets to job creation efforts.

'Young people need help'

"High youth unemployment has been worsened by changing global trade dynamics, US foreign aid cuts, and the imposition of reciprocal tariffs. Young people need help," Prime Minister Sam Matekane said last month.

Lesotho's finance minister revealed in February that 38% of the country's youth were unemployed.

The crisis became a flashpoint last month after an activist was arrested and charged with sedition for posting a video criticising the government's inaction.

The case drew international attention and sparked outrage among rights groups.

Relies heavily on textile

The landlocked nation, with a gross domestic product of just over $2 billion, relies heavily on textile exports, most of which is bound for the United States and benefitted heavily from duty-free access to US markets under the African Growth and Opportunity Act (AGOA).

But the country was hard-hit by Trump's "Liberation day" tariffs, which singled out Lesotho with the highest rate of any single nation – 50% – before the order was paused.

The government has warned it could lose up to 40,000 jobs if AGOA is not renewed at the end of September.