Cairo – Mubasher: Officials and economic analysts said that despite the impact of tariffs imposed by US President Donald Trump on goods entering the country to varying degrees on different countries, there are still strong opportunities for Egyptian exports to this market to grow. Meanwhile, the US is making the lifting of Trump's tariffs conditional on opening the Egyptian market to its exports.

Attracting investments

Yahya Al-Wathiq Billah, Minister Plenipotentiary and Head of the Commercial Representation Authority, said in his Zoom intervention at a symposium organized by the Egyptian Center for Economic Studies that the tariffs imposed by Trump on a number of foreign products will have a direct impact on Egyptian exports to the US market. However, at the same time, these changes may open up new opportunities for countries like Egypt to attract investment from other countries .

Al-Wathiq Billah explained that, according to the recently implemented measures, Egyptian exports that do not enjoy any preferential treatment will be subject to a 10% customs duty in addition to the preferential fees of the exporting country.

Products that previously enjoyed full customs exemptions, such as certain sectors in the QIZ, will also be subject to this 10 % duty. Al-Wathiq Billah indicated that products such as iron and aluminum will continue to be subject to a 25% duty, a rate applied by the United States to all countries worldwide.

US conditions for lifting tariffs

Al-Wathiq Billah explained that he had spoken with US officials last Friday, and that if certain non-tariff trade barriers that the US sees in Egypt are removed, such as restrictions on certain agricultural products like potato seeds, halal certification, air freight, and some issues in the telecommunications sector regarding allowing data transfers from data centers here abroad, then the removal of these tariffs imposed on Egypt may be considered .

He explained that Egypt is currently working to address some of these obstacles, particularly in areas such as communications and services. He emphasized that there are some issues that Egypt is finding difficult to resolve due to national security considerations, adding, "We are working to improve the issues that we can address without impacting national security or customs revenues ."

Al-Wathiq Billah believes that the goal of imposing US tariffs is not only to correct the imbalance in the trade balance between the United States and other countries, but also to reshape supply chains for heavy and advanced industries and advanced technology.

He added that the United States seeks to relocate the manufacturing focus of complex industries back to its own borders, a goal parallel to improving the trade balance. These measures also come as a result of significant pressure from major American companies, which have been negatively impacted by the principle of free trade in recent decades, with 90,000 factories closing in the United States over the past 20 years.

He added: "These pressures are pushing the current US administration to make decisions aimed at reducing the role of the World Trade Organization (WTO) and imposing stricter measures ."

Al-Wathiq Billah also spoke about Egypt's opportunities to attract foreign investment, explaining that countries subject to high tariffs imposed by the United States, such as China and Vietnam, may find it difficult to compete in the US market, which could enhance Egypt's ability to attract new investments.

Increase production capacity

He added that these investments could contribute to increasing Egypt's production capacity, which would positively impact its exports and strengthen its competitive position in the long term . Al-Wathiq Billah stressed that the Egyptian government and the private sector must move quickly to capitalize on these opportunities, improve the investment environment, and enhance production capabilities to meet the growing demand for Egyptian products.

He said, "This is a historic opportunity for Egypt. We are currently negotiating with Chinese delegations to arrange new investments in Egypt over the next two months. We are currently studying rapid measures to increase investments from China, Turkey, and Europe, as there is significant demand for investment in Egypt."

He added, "If we quickly exploit these opportunities, we can achieve additional investments in Egypt ranging between $10 and $15 billion over the next three years, in addition to the usual annual investments of approximately $10 billion ."

In response to a question about reducing the Israeli component of the QIZ agreement, which currently stands at 10.5%, Al-Wathiq Billah noted that Egypt began negotiations on this issue more than three years ago, but that these negotiations were halted after the events of October 7 due to regional tensions .

The trade situation between Egypt and America

Dr. Abla Abdel Latif, Executive Director and Director of Research at the Center, presented a presentation prepared by the Center on the trade file between the United States and Egypt, the nature of the customs duties announced so far, their global impact, and their expected impact on Egypt .

Abdel Latif reviewed the nature of the trade situation between Egypt and the United States, as there are historic economic agreements between the two countries, such as TIFA and QIZ .

Egypt's non-oil exports to the United States comprise a diverse range of approximately 70 products, led by ready-made garments, which accounted for 45.6% of Egypt's exports to the United States in 2024 (worth $1.24 billion), making it the most important sector in this trade relationship. Other major exports include fertilizers, iron, canned fruits and vegetables, carpets, fruits and nuts, and building materials .

Regarding the most important details of the new customs tariffs on Egypt, the Center’s presentation explained that they include: a 10% tariff + Most Favored Nation (MFN) tariff on Egyptian exports not included in preferential programs, a 10 % (Ad Valorem) tariff on exports from Qualified Industrial Zones (QIZs) , a 25 % (Ad Valorem) tariff on aluminum and steel exports, an MFN tariff only on a specific product list (Annex 2 - Raw Materials such as Graphite and Phosphate), and Reciprocal Tariffs ( the application of new tariffs to other countries, which may change the competitive landscape).

This is in addition to non-tariff barriers (NTBs) , which are seen as a potential additional US leverage (such as VAT issues and technical standards). Regarding the expected international impact of these tariffs, Abdel Latif indicated that they would harm the global economy as a whole, including the United States itself. She noted that China would be affected, but the impact was relatively limited (its exports to the US represent less than 14% of its total exports), and that smaller economies heavily dependent on the US market (such as Mexico and Canada) would be more affected.

This also represents an escalation in global protectionism, disrupts value chains, and diverts attention from other pressing global issues such as climate change and war . Regarding the expected impact on Egypt, Abdel Latif explained that Egypt will be affected, just like other countries exporting to the US, and that the tariff rate on Egypt is low, noting that Egypt is a very small player in global trade (its share does not exceed 0.26%).

Untapped export potential

She added that Egypt has huge untapped export potential to the United States in many sectors such as fertilizers, machinery, fruits, plastics, etc., as actual exports are still small compared to the potential, as untapped export opportunities in the fertilizer sector, for example, reach 81%, and the machinery sector about 98%, with the exception of the ready-made garments sector, which is the only one that exploits the export potential to the United States significantly (99% achieved). However, Egypt’s share of the US clothing market remained very small even when tariffs were almost zero, indicating competitiveness issues that go beyond the issue of tariffs .

Abdel Latif pointed out that regarding the direct impact of tariffs, the new tariff (10%) will erode the competitiveness of Egyptian ready-made garment exports (the most important sector), and may also make exploiting export potential in other sectors more difficult .

She explained that major competitors (China, Vietnam, Bangladesh, and Cambodia) have significantly larger market shares in the United States despite facing current or potential tariffs, largely due to their lower costs and internal incentives.

Abdel Latif emphasized that Egypt's small share of the US market, even with the previous zero tariffs, confirms that the biggest challenge is internal competitiveness, not just external tariffs. Tariffs may create opportunities for Egypt if other countries are more affected, but seizing these opportunities requires internal readiness to improve investment conditions and logistics to capitalize on the willingness of affected countries to relocate their investments in Egypt and export to the United States. There is an urgent need to move very quickly to implement deep and comprehensive internal reforms to boost exports and build resilience to face external challenges .

Abdel Latif pointed to the results of a study conducted by the center using artificial intelligence tools, which indicated the possibility of significantly increasing export rates in the ready-made garment sector, which could be applied to all sectors, if some reforms were implemented. It showed that raising the efficiency of ports to reach the efficiency of Cairo Airport to reduce the time required to release imports leads to a 25.9% increase in ready-made garment exports. Simplifying procedures to the level of "cardboard" - which has the simplest procedures and does not require regulatory bodies - reduces the total release time by 62.8% and boosts exports by 21%.

It stressed the need to reform the export support system, as reducing disbursement delays from 14.7 months (the current average) to 15 days would increase exports by 3-6%. This requires automating disbursements to occur within 15 days and eliminating delays in disbursement. The study also called for reducing customs clearance costs, increasing transparency, activating electronic payments, addressing informal fees, unifying customs valuation, and improving the investment climate in general .

instability in the world

For his part, Mohamed Kassem, Chairman of the Board of Directors of the Egyptian International Trading Company and Chairman of the Egyptian Exporters Association Expolink , commented, saying that what is happening today in America is a kind of uproar that is causing a kind of instability throughout the world. This is not unexpected, as what is happening now is something Trump has previously announced his intention to do, and this is his second term as President of the United States .

Qassem noted that the first time Trump assumed the presidency, he faced a degree of oversight from within the United States, as there were forces capable of influencing his decisions. However, the second time around, Trump has become more willing to fully implement his policies, enlisting the help of far-right think tanks like the Heritage Institute to develop long-term plans like Vision 2025, which he seeks to fully implement .

Qassim touched upon the fact that the global trading system we live in was designed more than 70 years ago, and he considered that the design of this system practically ended in 1995 with the establishment of the World Trade Organization, which established the rules for global trade under the GATT and GATS agreements on trade in services.

He pointed out that this system created a world of agreed-upon rules, where countries sought to specialize and divide labor to serve their economic interests . Qassem reviewed the challenges facing developing countries like Egypt in light of these transformations, noting that there is confusion in looking solely at the trade deficit, without taking into account other aspects such as the balance of payments and services.

He explained that Egypt had achieved a balance of payments surplus during certain periods of former President Mubarak's rule, when services played a significant role in offsetting the trade deficit .

He added: "The United States should not only consider the trade deficit, but should also consider the balance of payments as a whole, as the United States has a large surplus in the invisible transactions balance, as a result of the services it provides in global markets ."

Qassim spoke about the changes taking place in the international trading system, emphasizing that what we are witnessing today is the collapse of the global order as we have known it for the past seventy years. He noted that Trump's actions on Liberation Day represent "the straw that broke the camel's back" for the global trading system.

"What's happening on the surface may seem like noise, but the major forces operating beneath the surface are the ones that will continue to influence the global economy ," he said. Kassem emphasized that the opportunities presented by these transformations, such as the restructuring of global production chains, must be seized by Egypt. He explained that these opportunities have existed for five years, but have not been fully exploited due to the structural challenges facing the Egyptian economy.

He said, "We need to be prepared to address these opportunities, especially in light of the global trend toward investment and exports from Egypt. However, this requires structural reforms in areas such as taxation, education, and health." He concluded by saying, "The opportunities exist, but the more important question is who will be prepared to take advantage of them? This is the major challenge ahead ."

More geopolitical tension

For his part, Tarek Tawfik, Vice Chairman of the Federation of Egyptian Industries and President of the American Chamber of Commerce, said that the economic policies pursued by US President Donald Trump are characterized by "unclarity" and "ambiguity," considering that what is being implemented is not merely random steps, but rather a "systematic program."

He added that the world is facing geopolitical and economic tensions in light of Trump's protectionist measures, noting that the true purpose of these policies is not entirely clear, especially in light of the pressures exerted on some US sectors as a result of the trade openness that has prevailed over the past few years .

Tawfiq explained that the United States remains the largest beneficiary of the global economic system, as the US dollar controls 80% of the world's circulating currencies and 60% of global reserves, reflecting the United States' significant economic power.

He emphasized that today's American citizen is reluctant to work in simple jobs, which has prompted the United States to employ communities around the world to produce everyday goods, helping to maintain the lowest inflation rates and highest employment levels .

Tawfiq touched on the history of US protectionist policies, explaining that these policies began in the nineteenth century, but the constant repetition of these measures led to counterproductive results, such as world wars. He pointed out that one of the most worrying recent developments is China's ban on rare earth exports to the United States, reflecting an escalation in the trade war between the two countries .

Omar Mehanna, Chairman of the Egyptian Center for Economic Studies, commented during the discussions, saying that global crises, despite their challenges, can create new opportunities for the Egyptian economy if they are handled wisely and quickly. Mehanna said, "Sometimes crises create new opportunities, and that's what we're seeing today. The current crisis could be an opportunity for Egypt if we can act quickly and improve the investment climate ."

Mahna explained that the outflow of hot money from Egypt could have a positive impact on the economy, giving the country the opportunity to rethink its financial strategies. He added, "We may see the outflow of hot money as an opportunity to change our approach, particularly with regard to lowering interest rates, so that we can more positively support the private sector and increase production and investment ."