Following a tense week earlier this month, US President Donald Trump announced a three-month pause on the tariffs that were due to go into effect on US imports, giving global exporters, including Egypt, a breathing space to think about their next moves.
According to Trump’s earlier decision, Egypt would have been subject to 10 per cent tariffs on exports to the US. Other export heavyweights like China, Thailand, Vietnam, and Taiwan would have been subject to much higher tariffs. Trump has not put the tariffs levied on Chinese goods on pause, though he has exempted some products from them.
Exporters are currently analysing the expected declines in US imports should Trump go through with the tariffs, in order to assess Egypt’s capacity to fill the gap, Ayman Al-Ashri, a member of the Export Development Advisory Committee, told Al-Ahram Weekly.
Egypt’s ability to turn the situation to its advantage is expected to positively impact both production and export activity, he said.
Al-Ashri noted that identifying key sectors could help attract investors from countries facing high tariffs from the US, encouraging them to shift their production to Egypt. This would not only boost Egypt’s production and export capabilities for the US market but also increase foreign currency revenues, he added.
“The current tariff situation offers a promising opportunity for Egyptian exports to achieve ambitious targets if it is managed properly,” he said. He also highlighted the additional job opportunities that would arise from an increase in production capacity.
Egypt’s exports to the US reached $2.5 billion in 2024, according to the Office of the US Trade Representative (USTR). Ready-made garments are among Egypt’s top exports to the US, and Marie Louise, former head of Egypt’s Apparel Export Council, told the Weekly that the sector has strong potential to expand its presence in the US market, regardless of whether tariffs are ultimately imposed on Egyptian goods or not.
She noted that products exported through the Qualifying Industrial Zones (QIZs) framework continue to benefit from the lowest tariff rates, giving Egypt a competitive edge over countries like China. QIZ is a framework whereby goods that combine Egyptian and Israeli components manufactured in designated industrial zones enjoy zero-tariff entry to the US.
Minister of Investment Hassan Al-Khatib has been quoted as saying that approximately 40 per cent of Egypt’s total exports to the US are made under the QIZ agreement. Although it remains unclear whether QIZ exports will be fully exempt from the latest tariffs, exporters expect more clarity once shipments arrive in the US later this month, Louise said.
The UN Comtrade database shows that Egypt’s exports of garments and related accessories to the US surpassed $1.2 billion in 2024.
Fadel Marzouk, head of the Apparel Export Council, highlighted Egypt’s competitive advantage in terms of both pricing and quality when compared to key global players like China, India, Bangladesh, Vietnam, and Cambodia.
This provides greater opportunities for Egyptian garment exports to grow in the US market, he said, expecting exports to increase by 25 to 30 per cent in the near future.
Louise said that the steep tariffs, reaching as high as 145 per cent, imposed by Trump on Chinese imports have prompted Turkish and Chinese investors to look at shifting their operations to Egypt.
She noted that Egypt is becoming an attractive destination for foreign investors seeking to maintain access to the US market. Some investors have already begun production in Egyptian factories as a transitional step before fully relocating to the country, she said.
She pointed out that many factories are considering increasing their working hours by adding second and third shifts to meet rising demand, a move that is expected to boost production and create new job opportunities.
Efforts are also underway to train workers on newer production lines in anticipation of higher output in the coming period, she added.
Currently, about 275 factories out of the roughly 12,000 operating in Egypt’s garment sector focus on exports. The US market accounts for 60 per cent of their total exports, with the remainder going to Europe and the Gulf region, Louise said.
Marzouk said that the government is supporting the garment sector by establishing a textile city spanning 5.5 million square metres, which is expected to help raise Egypt’s garment exports to $12 billion by 2031, compared to $2.8 billion in 2024.
“The inflow of new investments is accelerating the development of Egypt’s textile industry, which has made significant strides in recent years through the adoption of advanced technologies and robot production lines,” Louise said.
* A version of this article appears in print in the 17 April, 2025 edition of Al-Ahram Weekly
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