As global trade undergoes a dramatic transformation, Egypt finds itself at a pivotal moment—facing both fresh challenges and unexpected opportunities. With the U.S. imposing steep tariffs on Chinese goods, questions are emerging about whether countries like Egypt can step in to fill the gap.

In this candid and timely conversation, we speak with Ayman Ismail, Associate Professor and Abdul Latif Jameel Endowed Chair of Entrepreneurship at AUC, and Founding Director of the AUC Venture Lab. He shares his perspective on how Egypt can position itself in this shifting landscape, the hurdles that need to be addressed, and the sectors where the country could truly shine.

The Q&A has been edited for length and clarity.

Business Monthly: With the U.S. imposing tariffs on Chinese goods, how realistic is it for Egyptian exporters to step in, especially in sectors like textiles and agriculture?

Ayman Ismail: U.S. trade policy has been highly erratic, so most businesses are holding off on long-term moves. Right now, it’s about short-term adjustments using existing capacity and suppliers. Expecting major investments in the near term isn’t realistic. Egypt does have trade agreements with the U.S., Europe, COMESA, and the GCC, but we’ve struggled to fully leverage them. Many barriers are local—macro conditions, institutional inefficiencies, and a tough business environment. The government must act quickly to remove these obstacles, which could have a strong multiplier effect. We’ve missed similar opportunities before due to a lack of effective reforms.

There is potential—if companies are prepared and the local climate improves. We’re already seeing Chinese firms exploring Egypt as a base to access the U.S. market. But it requires real local value-add, much like the model in Vietnam and Cambodia, where Chinese components are assembled and re-exported.

BM: Egypt isn’t the only country eyeing this opportunity. How does its competitiveness compare to regional players like Türkiye?

Ismail: The U.S. market is massive—there’s enough demand to accommodate exports from Egypt, Türkiye, Morocco, and others. It’s not a zero-sum game; multiple countries can benefit.

The real question is whether we can deliver locally. We do have the capacity, but can producers scale up quickly while maintaining quality? Can they access financing, manage logistics, navigate taxes, and meet export requirements? If we improve our local operating environment, Egyptian companies would be well-positioned to compete and take advantage of these shifting trade dynamics.

BM: Beyond traditional industries, are there untapped or emerging sectors in Egypt that could benefit from shifting trade routes?

Ismail: In manufacturing, Egypt already has a strong base in agribusiness, food products, textiles, mid-tech electronics, white goods, and automotive. We were also gaining traction in bus exports. These sectors can scale up with the right support. But a major untapped opportunity lies in services. While tariffs haven’t impacted services as much (yet?); The shift away from China is prompting Europe to seek nearshoring options—countries like Egypt, Morocco, and Türkiye are well-positioned. Egypt has a solid talent pool, strong language capabilities, and established ties with European firms. While we still face internal challenges, the potential to grow exports in tech, customer support, and other service sectors is significant.

BM: For startups and SMEs providing these services, what are the main barriers to scaling quickly enough to meet new U.S. demand?

Ismail: Startups and SMEs face different challenges. For SMEs, the main barriers are the operating environment and access to finance. The regulatory framework is still overly complex, with multiple regulators holding broad discretionary powers—a long-standing issue. While there’s been some progress, it hasn’t been enough to unlock the full growth potential of SMEs.

Financing is another major hurdle. Banks like Banque Misr and the National Bank of Egypt have expanded SME lending, and the Central Bank has pushed for larger SME portfolios. Institutions like MSMEDA have also played a role. But more targeted support is needed to realize the full potential of SMEs, particularly in boosting exports and job creation—two of Egypt’s top economic goals.

Startups are in a different space. Most are tech-enabled and focused on rapid growth and attracting venture capital. From 2020 to 2022, the startup ecosystem expanded quickly, but 2023–2024 brought macroeconomic challenges that slowed momentum. With those issues now stabilizing, we’re hopeful for renewed growth, especially at the regional level. To truly help startups scale, Egypt needs a focused government initiative that champions high-growth startups, positioning them as anchors that can pull the wider economy forward.

BM: While the tariff shift may open new doors, what structural challenges or risks could limit Egypt’s ability to capitalize on them?

Ismail: We’re witnessing a global trade reconfiguration. The U.S., long a champion of free trade, is now leaning more protectionist. This shift is moving global trade away from multilateralism toward bilateral agreements. It’s still unclear what the new system will look like—it could take a decade to stabilize. Egypt’s trade volumes, both in imports and exports, remain relatively low. To truly benefit from this shift, we need to better integrate into global supply chains, diversify our exports—both in goods and services—and expand into new markets like Europe and Asia.

BM: How can accelerators like the AUC Venture Lab help address these challenges?

Ismail: AUC Venture Lab has spent the past 12 years supporting tech-enabled, innovation-driven startups. We’ve worked with over 400 startups that have collectively raised more than $370 million. We started with e-commerce, moved into fintech, and are now growing deep tech and green tech sectors with strong future potential. Our role is to de-risk the startup journey. Starting a company and attracting investment is inherently risky, so we help entrepreneurs refine their business models, improve investment readiness, secure funding, and lay the groundwork for sustainable growth.