The new tariff policy announced by US president Donald Trump took effect immediately. It aims to boost American manufacturing, reduce the trade deficit, and create more jobs in the US.
Egyptian exports to the US
The value of trade between Egypt and the US increased in the first 10months of 2024, reaching USD7.593 billion. Total Egyptian exports to the US amounted to approximately $1.95billion, and the main export categories included:
Garments: Clothing was valued at $663.61million, while manufactured goods or crochet were valued at $366.05 million.
Iron and steel: Exports in this category amounted to $202.62 million.
Carpets and textile floor coverings: These products contributed $124.63 million to total exports.
Prepared vegetables, fruits, and nuts: This category saw exports worth USD95.65 million.
Glass and glassware: Exports in this sector amounted to $70.14 million.
Ready-made garments accounted for 53.1 percent of Egypt's total exports to the US.
Trade between Egypt and the US
Bilateral trade between Egypt and the US has witnessed fluctuations. In the first nine months of 2022, trade between the two countries increased to $7.3 billion, compared $6.5billion during the same period in 2021, recording a growth of 13.4 percent. By 2023, Egyptian exports to the US declined by 15.5 percent year-on-year, reaching $1.9 billion, compared to approximately $2.3 billion in 2022. Similarly, US exports to Egypt declined by 22.7 percent in 2023, reaching $5.4billion, down from $6.9 billion in 2022.
US investments in Egypt
As of November 2024, US investments in Egypt amounted to approximately $8billion. This figure reflects concerted efforts by Egypt to attract foreign direct investment, particularly from the US, through implementing economic reforms and offering incentives to foreign investors.
Egyptian investments in the US
Historically, Egyptian investments in the US have been relatively modest compared to US investments in Egypt, and the focus has primarily been on promoting exports to the US market rather than large-scale direct investments.
Repercussions of the new US tariff policy
The US imposition of a 10 percent tariff on all imports from Egypt, as announced by President Trump, is expected to significantly affect Egyptian exports. Key sectors such as garments, iron and steel, and textiles, which constitute a significant portion of Egypt's exports to the US, may face a decline in their competitiveness in the US market. This development is also likely to lead to a decline in export volumes and negatively affect Egypt's trade balance with the US.
In response, Egyptian exporters may need to explore alternative markets or improve the value proposition of their products to mitigate the impact of the tariffs. Additionally, the Egyptian government may seek diplomatic channels to negotiate exemptions or reductions in the tariffs imposed to protect export sectors.
Egyptian investments in the US
Historically,Egyptian investments in the US have been relatively modest compared to US investments in Egypt, and the focus has primarily been on promoting exports to the US rather than large-scale direct investments.
Repercussions of the new US tariff policy
The US imposition of a 10 percent tariff on all imports from Egypt, as announced by President Trump, is expected to significantly affect Egyptian exports. Key sectors such as garments, iron and steel, and textiles, which constitute a significant portion of Egypt's exports to the US, may face a decline in their competitiveness in the US market. This development is also likely to lead to a decline in export volumes and negatively affect Egypt's trade balance with the US.
In response, Egyptian exporters may need to explore alternative markets or improve the value proposition of their products to mitigate the impact of the tariffs. Additionally, the Egyptian government may seek diplomatic channels to negotiate exemptions or reductions in the tariffs imposed to protect export sectors.
Photo: The US imposition of a 10 percent tariff on all imports from Egypt (the policy has been reversed for 90 days), is expected to have a negative effect on Egyptian exports the US. (by Adobe).