The Trump administration introduced on April 2 a broad tariff policy, establishing a 10% baseline on imports from U.S. trade partners. Egypt was among the countries facing the lowest rate, with a 10% tariff applied to most product categories.

Soon after the announcement, President Trump suspended tariffs for most countries for 90 days—excluding China. Chinese imports were instead hit with tariffs of up to 145%. This marks a major shift in U.S.-China trade relations; in 2024, bilateral trade between the two countries totaled $582.4 billion, according to the Executive Office of the President.

However, the move opens the door for alternative suppliers, such as Egypt, to strengthen their presence in the U.S. market. Here’s how.

A window for Egyptian exports

“The newly imposed Trump tariffs mark a pivotal shift in global trade relations, bringing about a period of heightened protectionism, economic uncertainty, and geopolitical tensions,” said Sherif Fahmy, CEO of N Gage Consulting, in an interview with Business Monthly. “While the Trump administration frames these actions as necessary to restore fairness and reduce dependence on foreign goods, the international backlash and economic consequences are unfolding rapidly,” Fahmy added.

Egyptian businesses are feeling the impact both directly and indirectly, according to Shaimaa Husseiny, Director of Middle East Customs and International Trade at PwC. “The broader application of a 10% tariff on all imports means that direct exports to the U.S. could face additional cost pressures. Many Egyptian firms operate within integrated regional or global value chains, which could also be affected by these tariffs.”

Even companies not directly exporting to the U.S. may be affected through partners in regions such as the GCC, Europe, or Asia that ultimately ship products to the American market, she said.

“Egypt retains an advantage in terms of market access at a time when many competitors are facing significantly higher trade barriers.”

Tariff impact on key sectors 

This exposure is especially significant in sectors such as automotive parts, textiles and apparel, and electronics. However, the tariffs could impact the cost of goods Egypt imports, creating ripple effects throughout the local economy.

In 2024, bilateral trade between Egypt and the U.S. totaled $9.8 billion. Exports from Egypt to the U.S. amounted to $2.5 billion, while imports from the U.S. were $7.3 billion, resulting in a significant trade deficit for Egypt.

Apparel is Egypt’s leading export to the U.S., accounting for over 45%—approximately $1.2 billion—of total Egyptian exports. This is largely facilitated through the Qualified Industrial Zones (QIZ) agreement, which grants duty-free access to Egyptian goods meeting local content requirements. Other key export sectors include fertilizers (6.4%), iron and steel (6.2%), carpets (5.1%), and processed food (5.1%).

Despite Egypt accounting for just 1.65% of total U.S. apparel imports, exports to the U.S. represent only 5% of Egypt’s overall export portfolio, meaning the tariffs may not have a significant effect on the broader economy. Husseiny noted, “The textile and garment industry is especially vulnerable, as it’s heavily export-oriented and price-sensitive. Historically, programs like the QIZ have provided tariff-free access to the U.S. market. However, the latest Executive Order issued by the U.S. administration appears to disregard most existing preferential trade agreements, with the exception of the USMCA.”

Exploring opportunities amid trade shifts

Despite the risks, there’s an opportunity for Egypt to boost its textile exports. Mina Naguib, owner of the Egyptian International Company for Textile, said, “If just 1% of production shifted from Chinese to Egyptian factories, it would overwhelm our local industry—we’d be producing 10 times more. We have a good chance.” Naguib highlighted Egypt’s growing role in U.S. textile exports, with American brands like Reebok, Tommy Hilfiger, and Calvin Klein already outsourcing production to Egypt.

However, not everyone agrees on the potential impact. Mohamed Fouad, Economic Expert and Senior Vice President of MEA Operations at COPC Inc., argued, “It doesn’t really matter, because if everybody gets a 10% baseline, then it’s a net-zero effect.”

Fahmy from N Gage Consulting, however, believes Egypt holds a relative advantage: “This relatively low tariff regime provides Egyptian products with a comparative and competitive edge in the U.S. market, especially when compared to key exporting countries like China, India, and Bangladesh.”

Fahmy warned that global supply chain disruptions and a stronger U.S. dollar could worsen inflation in Egypt, further devaluing the pound and raising import and debt servicing costs. Sectors like automotive, already vulnerable to high input costs and currency volatility, could face further challenges. Additionally, Trump’s “Buy American” agenda could limit U.S. foreign direct investment (FDI) in Egypt, especially in high-tech sectors.

“There’s a noticeable shift towards sourcing from closer regions such as Southern Europe, Turkiye, and North Africa. This change is largely a response to the growing risks associated with long-distance supply chains and the geopolitical uncertainties that have intensified in recent years,” Husseiny explained. She also emphasized that businesses are likely to adopt strategies like trade-friendly zones, customs warehousing, and multi-jurisdictional sourcing to better manage risks, streamline operations, and improve cost efficiency in an increasingly complex global trade environment.

Strategic steps forward 

To navigate these changes, businesses must adopt scenario-based planning and enhance operational resilience, Fahmy emphasized. “Developing contingency strategies to address changing trade terms while protecting margins and receivables is key,” he said. He also stressed the government’s role in turning this moment into long-term economic benefits by positioning Egypt as a competitive export and manufacturing hub, in line with Egypt’s Vision 2030 goals.

Fouad concluded, “We need to understand our international positioning in this potentially new system. This is an opportunity for Egypt to grow, especially by increasing exports in sectors where we already have a competitive edge.”

Husseiny added that doing nothing is not an option. “The first and most critical step is for companies to validate their existing business models under new cost realities. Scenario modeling is key, and it requires reliable trade and financial data.”