- Editor: Sara Fahmy
- Photographer: Malak Hosny
President Donald Trump’s executive tariff order on allies and rivals alike on April 2 shocked multiple U.S. trading partners and global markets.
In the past several weeks, he has slapped tariffs of 10 percent on Japan and South Korea, 10 percent on the European Union as well as 25 percent on their steel, aluminium and cars and 145 percent on China, to name a few.
This has ripped through global exchanges where stocks and the US dollar have fallen as gold prices are reaching all-time highs. The ripple effects of these tariffs are expected to impact countries around the world, including Egypt, which has already been grappling with economic instability.
According to Oxford Economics, tariffs are taxes imposed by a government on goods and services imported from other countries. They’re usually a percentage of the price of the goods. For example, a 10 percent tariff on a product that costs 300 EGP is 30 EGP. This additional cost will either be paid by the manufacturer or passed on to the consumer through a higher price. This is the problem currently faced by Egyptian exporters and many other U.S. trading partners, as their exports will now be priced higher than their local competitors in the U.S. market.
Since early April, Trump has also announced that higher tariffs will be imposed on imports from 60 countries, which did not include Egypt. However, the tariffs are not set to go into effect for another 90 days for all countries, except for China, who is currently facing tariffs of 145 percent according to CBS News.
In response to the tariffs, China’s commerce ministry said Beijing “firmly opposes” the reciprocal tariffs and “will take countermeasures to safeguard its own rights and interests” according to Reuters. As for the EU’s response, European Commission President Ursula von der Leyen said the EU is “now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.”
Although Egypt was not one of the countries which had higher tariffs than the 10 percent baseline imposed upon them, concerns of a global recession, and a trade war are rising. Egyptians are left wondering whether their economy will be affected amongst all the tensions.
According to the Office of the United States Trade Representative, in 2024 Egypt’s annual imports from the U.S totalled $6.1 billion; exports to the U.S added up to $2.5 billion.
Associate Professor Amr Adly, a political economist at the American University in Cairo, explained that the United States is not one of Egypt’s main trading partners.
“Egypt imports more from the U.S. than it exports, which is why it wasn’t slapped with very high tariffs. It is not running a huge trade surplus with the U.S, so the direct impact on the Egyptian economy is not likely to be huge,” he said.
However, in addition to the direct impact, there is also an indirect impact that needs to be considered.
According to Enterprise, a Cairo-based news publication that reports on key economies and industries in the Middle East and North Africa, the global trade war and fears of lower global economic growth have pushed Oxford Economics to cut its growth forecast for Egypt by 0.1 percentage point.
It now expects Egypt’s real gross domestic product (GDP) growth to come in at 4.1 percent in 2025.
“The indirect impact is more important as the tariffs are likely to lead to both higher global inflation and an economic slowdown of the global economy. This global inflation is likely to translate into higher local inflation in Egypt because of our import dependency,” said Adly.
Although the tariffs negatively impact Egypt’s economic growth, they may also create opportunities for certain sectors, such as the ready-made garments industry, by attracting foreign investment. Adly explained that Asian garment producers may relocate production to Egypt to take advantage of the lower tariffs.
Noha Omar, assistant professor in the Department of Economics, agreed with Adly but emphasized that Egypt must “fast-track reforms to improve the investment climate, logistics, and export support, and provide incentives for factory setup, industrial financing, and support for small businesses to boost production capacity” in order to fully capitalize on this opportunity.
Another potential benefit of the lower tariffs is increased sales of Egyptian ready-made garments to the U.S.
“Even with a 10 percent tariff, Egypt’s apparel exports remain more competitive compared to countries like China, Vietnam, and Bangladesh, which face much higher tariffs. Industry leaders estimate Egypt could increase apparel exports to the US by 25–30 percent in the near term,” explained Omar.
In light of the tariffs, Egypt may consider export diversification by trying to serve new markets other than Western markets to protect its economic interests.
“Egypt has to diversify and strengthen its partnerships beyond the US: by setting and activating regional integration with trade blocs like the African Continental Free Trade Area (AfCFTA) and the Common Market for Eastern and Southern African (COMESA) to access new markets,” said Omar.
She went on to explain that Egypt is trying to attract foreign investment from countries that are hit hardest by US tariffs, such as China, Turkey and Vietnam, with the aim of becoming a manufacturing and export hub for the region.
