Could Trump’s tariffs be a boon for Egyptian industries? US President Donald Trump’s sweeping new tariffs rattled global markets, with a blanket 10% duty on all imports that took effect on Saturday. Additional, higher rates on goods from 57 countries — including China and the EU — are set to follow on 9 April. The tariffs could present an unexpected opportunity for Egypt’s industrial base, particularly in manufacturing, as firms seek to sidestep higher duties by relocating operations to lower-tariff countries like Egypt.

Egypt has been slapped with a 10% tariff — making it one of the least affected countries. The lighter tariff could position Egypt as a more attractive investment destination for international manufacturers looking to maintain access to US markets. We dove into the Trump administration’s tariff and what it means for Egyptian goods here.

Among the industries positioned to gain from the tariffs is the ready-made garment industry, Garment Export Council Chairman and Giza Spinning and Weaving CEO Fadel Marzouk told EnterpriseAM, adding that the move could potentially attract foreign companies seeking to relocate to nations subject to reduced tariffs. “We expect around USD 2 bn in new investments in the sector, as the market becomes increasingly attractive to companies from Turkey, Vietnam, China, and India,” Marzouk said.

BACKGROUND- The US was a top importer of Egyptian ready-made garments in the first two months of 2025, with imports reaching USD 193 mn, up 5.5% y-o-y, according to a report from the council. Exports to Europe jumped 49% y-o-y to USD 147 mn, while shipments to Turkey surged 89% y-o-y to USD 66 mn.

Ambitious export goals: The Garment Export Council is looking to increase the sector’s exports by 20-15% a year over the next five years, aiming to hit USD 12 bn by 2030, according to Marzouk.

To help make the goals reality: Egypt plans to bring 300 new ready-made garment factories online over the next five years, according to Marzouk, who confirmed that the Madbouly government has allocated 5.5 mn sqm in Minya for ready-made garment and textiles industrial zone

It’s not just the ready-made garments sector that could stand to gain, with the fresh tariffs giving our engineering industries sector the chance to penetrate the US market, a market that has traditionally been difficult to penetrate, head of the Engineering Export Council Sherif El Sayyad told EnterpriseAM. El Sayyad noted the biggest upside to the tariffs could be increased interest from companies looking to relocate their headquarters and manufacturing operations to Egypt, driven by lower production costs and an improved investment climate. He expects more Chinese, Japanese, and Turkish engineering industries players to enter the local market in the near future.

To sweeten the pot: El Sayyad stressed the need to attract large companies in feeder industries to reduce reliance on imports and raise the local component ratio from 50% to 70%, boosting value added through manufacturing and exports. The sector is targeted to record USD 6.5 bn in exports this year — exports saw a 22% y-o-y jump during the first 11 months of 2024 to record an all-time high of USD 5.1 bn.

Then, there’s the auto sector: With the auto industry scrambling to recalibrate operations amid Trump’s tariffs and the EU’s expected retaliation, Egypt could gain from supply chain shifts. The tariffs are expected to disrupt global trade in vehicles and spare parts, driving up costs and hitting production — a shake-up that could boost demand for Chinese cars in Egypt and accelerate local assembly, Khaled Saad, head of the Association of Automobile Manufacturers, told us. He expects Egypt to become an automotive hub, mainly for Chinese vehicles, EVs, and auto feeder industries.

Tariffs are bad news for Egyptian steel, however: Moves from the US and the EU are expected to hurt steel exports from Egypt, Mohamed Hanafy, head of the Chamber of Metallurgical Industries told us. The US tariffs triggered the EU to cut its steel imports by another 15% starting this month, hitting Egypt’s two biggest export markets for steel.

A foreseen rise in protectionism won’t help: While Egypt may gain a short-term advantage in the US market — where tariffs on other countries are higher — Hanafy cautions that the bigger risk lies in a wave of retaliatory protectionism. Countries hit by US tariffs could respond by imposing their own restrictions, crowding Egypt out of alternative markets and intensifying global competition.

REMEMBER- The US dropped from fourth to sixth place among Egypt’s steel export markets last year, with purchases falling to USD 126.6 mn from USD 230 mn in 2022. European demand also softened, with exports to Italy dropping 43% y-o-y to USD 185 mn, and those to Spain dipping 42% to USD 225 mn.

Steel exports were up in 1Q, but outlook dims: Egypt’s steel exports rose between 10-15% y-o-y in 1Q 2025, despite mounting global headwinds, according to Hanafy. “We were hoping for 20% y-o-y growth in exports by year-end, but the outlook is now unclear due to these tariffs,” he said.

Egyptian steelmakers are expected to scale back output as they assess the fallout from the new tariffs, Hanfy said, noting that production is already running at 55% capacity for steel and 90% for sheet metal, with further reductions likely in the short term.

Calling on the state to step in with larger export subsidies: Ahmed Zaki, secretary general of the Exporters Division at the Cairo Chamber of Commerce, told EnterpriseAM that while Egypt faces the lowest rate under Trump’s new tariffs, the move will still impact exports to the US. He called on the government to take this into account when disbursing export subsidies, suggesting emergency support to protect FX inflows until the decision is reversed or amended.

Preemptive moves by the state: The government formed committees to address the effects of Trump’s tariffs — direct and indirect. The committees are tasked with conducting a comprehensive review of Egypt’s customs to adapt to recent global developments and, particularly, the tariffs imposed by some countries in response to US tariffs, a senior government official previously told EnterpriseAM.

Global freight and shipping could also come under pressure, Amr El Samadouny of the International Transport and Logistics Division told EnterpriseAM, warning the measures violate the General Agreement on Tariffs and Trade (GATT) rules and risk further disrupting trade and raising industrial costs.

Your top industrial development stories for the week:

• United Egyptian Company for Agricultural Development is gearing up to launch a EGP 2 bn industrial complex that specializes in dates and date products — molasses and sugar. (Al Borsa)
• Modon Holding and Elsewedy Industrial Development will develop and run an industrial zone in Ras El Hekma, which is set to span 10 mn sqm and employ more than 20k people.