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On April 2nd, 2025, a U.S. announcement made by President Donald Trump announced a set of tariffs that is dubbed “liberation day” duties. This set of tariffs aimed to address trade imbalances with over 90 countries. Among the countries that were affected was Egypt. However, the million-dollar question remains: “Was it a positive or negative effect?” Egypt is facing a 10% tariff on its exports to the United States, effective April 5, 2025.
This move is a part of a broader U.S. strategy to impose a baseline 10% tariff on all imports. It has sparked debates about its global ramifications as it was coupled with higher “reciprocal” rates for certain nations. The tariff increase introduces to Egypt a mix of opportunities and risks. That is because Egypt is a nation that is currently navigating economic challenges. This article aims to unpack how this new set of tariffs will affect or create a shift in Egypt’s economy.
Let’s unpack how a 10% duty could redraw Egypt’s trade playbook—and why your next move might hinge on reading between the lines.
The Egyptian/American Trade Relationship
The trading relationship that Egypt has with the U.S. is one that can be described as modest but significant. In 2023, Egyptian exports to the U.S. totaled $2.73 billion, primarily driven by textiles, apparel, and agricultural goods like fruits and cotton.
Let’s be practical; the new tariff percentage of a 10% increase is one that is low compared to other percentages, like Vietnam’s 37%. For Egyptian textile manufacturers, this could mean a little hike in the price of their produce. Allow me to walk you through a hypothetical example. A $20 pair of cotton shoes will now cost $27.4 in the U.S. market.
Does the Story End Here?
Allow me to say NO. As a matter of fact, it doesn’t. It doesn’t end with direct trade effects; Egypt’s economy is deeply intertwined with global dynamics. This means that such a tariff’s broader fallout could cause a bit of a sting. The Suez Canal, which is a vital artery for Egypt’s revenue, might experience reduced shipping traffic.
That is, if Trump’s policies spark a global trade war. After China’s retaliation on the U.S. and with the European Union improving duties on $22 billion of U.S. products, trade volumes could shrink a bit. That is because if you did the math, you’d find that fewer ships passing through the canal equals fewer foreign currency inflows. This is crucial for a country that relies on imported machinery, food, or even fuel.
The Economic Equation: Why Invest in Egypt?
Egypt’s real edge isn’t just cost; it’s ready infrastructure. With proactive policy, trade diplomacy, and industrial support, Egypt can turn this global shake-up into a growth story.
1- Growing Solid Infrastructure
Egypt is investing heavily in ports, logistics zones, and intermodal networks.
- Modernized ports like October Dry Port, Port Said Port, Alexandria Port, Ain Sokhna Port.
- New rail and road corridors linking industrial zones to major cities and ports.
- Logistics hubs are integrated into industrial parks.
2- Gateway to 3 Continents
With rising production costs in Asia and disruptions to long-haul shipping, Egypt offers an agile alternative for companies seeking to de-risk their supply chains and move closer to consumer markets.
Egypt sits at the crossroads of Africa, Europe, and the Middle East, offering unrivaled access to markets worth trillions. The Suez Canal—a shortcut for 12% of global trade—keeps Egypt central to supply chains, even if U.S.-bound shipping slows. For manufacturers, this means easier exports to the EU, Africa (via COMESA trade agreements), and Gulf Countries (GCC Markets) without relying solely on the U.S. market.
Shipping from Egypt means faster delivery to global customers. For example:
- Just 7–10 days to Europe by sea.
- 3–5 days to GCC countries.
- 10–15 days to the U.S. East Coast.
- Next-day delivery to most African and Middle Eastern cities by air.
3- Cost Efficiency with a Competitive Edge
Egypt’s population exceeds 110 million, with 62% under 30—a dynamic, trainable labor pool ready to fuel growth in labor-intensive industries.
Egypt’s labor costs are 70% lower than China’s and 50% below Turkey’s, making it a magnet for textiles, agri-processing, and automotive industries. Pair this fact with its legendary long-staple cotton (a global benchmark for quality), and the 10% U.S. tariff becomes a surmountable hurdle. Companies like Elsewedy Industrial Development further sweeten the deal with turnkey factories, tax breaks, and streamlined permits.
4- Diversification = De-Risking
With Trump’s tariffs reshaping global trade, Egypt offers a hedge. Its new focus on non-U.S. partners (e.g., China, India, Europe, Africa, and the Arab world) aligns with investors seeking to avoid overexposure to Western markets.
Foreign factories in industrial zones benefit from 0% customs duties on machinery, 5 to 10 years of tax exemptions, and simplified profit repatriation. In 2025, the state is set to inaugurate new specialized industrial cities in Damietta and El Minya, aiming to attract more FDI by offering a broader portfolio and diversified investment opportunities.
5- Egypt’s Green Energy Leap Toward Sustainability
Egypt’s recent push into green energy sources offers another futuristic diversification. Its ambitious $40 billion green hydrogen strategy aims to produce the world’s lowest-cost hydrogen by 2050—estimated at just $1.7 per kg.
This strategy is complemented by Egypt’s rapid solar expansion, most notably through the Benban Solar Park—one of the largest solar installations in the world. Located in Aswan, Benban spans over 37 square kilometers and hosts over 30 energy companies, generating nearly 1.5 GW of power. It showcases Egypt’s capacity to scale renewable energy infrastructure with international collaboration, reduced risk, and long-term returns.
Thinking Ahead: Make a Genius Move—Build in Egypt
Egypt’s rapid steps to strengthen the state’s industrial sector are creating an ideal entry point for investors and manufacturers seeking new opportunities—especially amid a rapidly shifting global landscape. Egypt is becoming increasingly attractive for industrial expansion thanks to its strategic geographic location, competitive labor market, and strong access to major international markets.
If you’re considering starting or relocating your factory to Egypt, it’s essential to partner with experts who understand the terrain.
We recommend consulting Elsewedy Industrial Development —a trusted leader in developing fully integrated industrial cities across Africa, tailored to modern manufacturing needs. With a proven track record, robust infrastructure, and investor-friendly ecosystems, Elsewedy Industrial Development provides streamlined solutions that guide you from land selection to turnkey operation.
Whether you’re in textiles, food processing, logistics, or heavy industry, they provide the tools and support to help you thrive in one of MENA’s most promising industrial hubs.
Final Thoughts
The 10% U.S. tariff on Egyptian exports strengthens the case for localized production. By manufacturing goods in Egypt (e.g., textiles, tech, machinery, or agri-processing) and selling directly to Africa, Europe, or the Middle East, exporters can sidestep U.S. duties.
So, where does this leave Egypt? The 10% U.S. tariff isn’t a knockout punch. In fact, it may be the wake-up call Egypt needs to encourage exports and leverage the circumstances to its advantage. The real test lies in how Egypt navigates the global turbulence unleashed by this trade shake-up. For now, Egyptian policymakers and businesses must remain alert and agile in their understanding, balancing short-term shocks with long-term gains in a world where trade rules are being rewritten overnight.
