The global trade war is cranking up a gear, and businesspeople and policymakers alike from across the globe are still trying to assess what impact the Trump administration’s blanket tariff of 10% on all incoming goods will have. The baseline rate came into effect yesterday, with higher rates — up to 49% — for 57 countries due to come into effect on 9 April. The scope and magnitude of the action have not gone unnoticed, with trade experts like former White House trade adviser Kelly Ann Shaw describing the move as “the single biggest trade action of our lifetime,” in comments to Reuters.

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A questionable formula: Trump personally chose a formula based on two variables; the trade deficit with each country and the total value of its US exports, the Washington Post wrote citing two sources it said are familiar with the matter.

Egypt got off relatively lightly, with the country subject to only a 10% levy, alongside our Arab neighbours in Saudi Arabia, Morocco, Oman, Yemen, Sudan, Kuwait, Lebanon, Qatar, Bahrain, and the UAE. However, not everyone in the region was as fortunate, with Syria set to face a 41% tariff, Iraq a 39% tariff, Libya a 31% tariff, Algeria a 30% tariff, Tunisia a 28% tariff, and Jordan a 20% tariff.

The US slapped China with a 34% tariff, taking the total tariff on Chinese imports to 54%. It also targeted the EU with 20%, Vietnam with 46%, and Taiwan with 32%.

China strikes back, others might soon follow: The move is set to ignite a global trade war after decades of liberal trade measures from the US, with trading partners widely expected to retaliate. Beijing led the pack with a 34% tariff on all goods imported from the US, with the EU expected to follow soon. Other countries are attempting to negotiate their way out of the measures, including Vietnam, whose president To Lam had a “ productive call ” with Trump, and will meet to negotiate a trade agreement soon.

Despite Trump’s talk of trade deficits, it’s Egypt that runs a pretty heavy trade deficit with the US. The US ran a USD 3.5 bn trade surplus with Egypt in 2024, according to the Office of the US Trade Representative. The direction of travel is also in the US’ favor, with its trade surplus with us increasing 69.4% y-o-y last year, as US exports to Egypt increased 36.0% y-o-y to USD 6.1 bn and Egyptian exports the other way only inched up 6.7% y-o-y to USD 2.5 bn.

But it’s still unclear how Egypt — let alone the global economy — will be impacted, with the Investment Ministry currently studying the implications of the decision, Asharq Business reports, citing an unnamed government official. One unknown is if the decision will apply to goods exported through the QIZ agreement that enables Egypt to export to the US duty-free if the products have at least 10% Israeli input, which some industry insiders suggest will remain unaffected.

Some think that the decision could actually be a boost for Egyptian exports, with one unnamed government official telling the regional outlet that the country’s comparatively low tariff rate will increase its competitiveness and attract investors like China that are seeking to bypass higher tariff rates elsewhere. Egyptian Businessmen Association Chairman Ali Issa mirrored this view, pointing to garments as a sector — the largest source of US-bound exports — that has the potential to take advantage of the situation by upping its exports to the US. But there’s concern that a resultant global uptick in inflation could move investment out of emerging markets, according to EFG Hermes’ Mohamed Abu Basha.

We dive more into the response from global investors and financial markets in Planet Finance, below.

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