Good morning, all. We have a diplomacy-heavy issue for you this morning as we dive into Egypt’s USD 53 bn plan to reconstruct Gaza unveiled during yesterday’s emergency Arab League summit.

So, when do we eat? Maghrib prayers are at 5:57pm in the capital, and you’ll have until 4:49am tomorrow to hydrate and caffeinate ahead of fajr.

PSA-

WEATHER- Cairo is in for a rainy day, with a high of 20°C and a low of 12°C, according to our favorite weather app. The Egyptian Meteorological Authority is predicting light to moderate rain with a chance of thunder alongside dusty winds.

It’s as cold and rainy in Alexandria, with a high of 19°C and a low of 11°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

WATCH THIS SPACE-

China eyes Egypt as export hub amid US trade tensions: Chinese companies are expected to invest USD 2-3 bn in moving production to Egypt, particularly the Suez Canal Economic Zone (SCZone), as the Asian country looks to maintain export access to global markets amid trade pressures from the US, deputy head of the China committee in the Egyptian Businessmen’s Association Mostafa Ibrahim told Al Arabiya.

Some 20-30 Chinese companies are considering expansion into the local market this year, Ibrahim added. Most of these companies focus on high-export industries like readymade garments, textiles, home appliances, and technology. Nearly two-thirds of the investments are expected to flow into areas near Suez, while the remaining third will go to inner industrial zones, Ibrahim added.

ICYMI- US President Donald Trump earlier this week signed off on doubling tariffs on Chinese imports to 20%, with the directive going into force yesterday.

The rationale: Chinese companies are increasingly expanding manufacturing to Egypt to leverage its freetrade agreements with the US and Europe, which could allow them to bypass tariffs as they look to maintain exports to these markets. Egypt’s low-cost labor and large consumer market are also fueling the push.

DATA POINT-

Pharma sales continue to pick up in 2025, increasing 54.7% y-o-y in value in the first month of the year to hit EGP 21.5 bn, reports Souq Al Dawaa, citing unnamed industry insiders. Sales volume was a modest 6.5% y-o-y increase.

The sector ended 2024 on a high note, recording a 42% y-o-y increase in sales value despite a 3% y-o-y dip in sales attributed to the FX crisis affecting production lines. The increase came in the second half of the year when the Egyptian Drug Authority approved several price hikes in response to calls from local pharma companies that the prices should reflect new FX rates following the float of the EGP in March.

MARKET WATCH-

OPEC+ to press ahead with oil output hike next month: OPEC+ decided to proceed with an earlier decision to gradually increase oil production from April in a move that will see it unwind long-standing output cuts, it said in a statement. The oil cartel will phase out 2.2 mn bbl / d of production cuts until September 2026 under a plan it drew up back in December after delaying plans to roll back the supply cuts several times. The hike is the first by the coalition since 2022.

The announcement sent oil prices tumbling: Brent crude fell 0.7% to USD 71.12 a barrel on Tuesday, it hit a session low of USD 69.75, its lowest since September, and compounding losses triggered by the introduction of US tariffs on China, Canada, and Mexico a day earlier.

THE BIG STORY ABROAD-

Trump is once again dominating the international front pages: US President Donald Trump’s address to Congress — his first since returning to office — saw him outline his administration’s agenda, defend new tariffs, and address the Ukraine-Russia conflict and US policy in the Middle East. (Bloomberg | CNN | AP | The Guardian | Wall Street Journal | Reuters)

AND IN THE BUSINESS PAGES- Markets continued to digest the latest Trump tariffs throughout trading yesterday until US Commerce Secretary Howard Kutnick suggested the US could ease tariffs on Mexico and Canada, with an announcement coming as soon as today. The news triggered a late-session rally that helped pull the Nasdaq up after it briefly dipped into correction territory — it closed down 0.4%. The S&P 500 closed down 1.2%, while the Dow Jones fell 1.6%. (Reuters | Bloomberg)

The (potential) relief comes after a series of retaliations: Trump’s tariffs — 25% on Canada and Mexico, plus a fresh hike on Chinese goods — sent stocks tumbling as all three countries hit back. Canada hit back with 25% tariffs on USD 30 bn worth of US imports, with plans to extend the levies to another USD 125 bn worth of goods in 20 days. China also responded by slapping 10-15% tariffs on USD 21 bn of US agricultural products while imposing export and investment restrictions on 25 American firms.

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We take a deep dive into the plans to establish a unified Arab electricity market.

Tags: