The window China’s zero tariffs opens for Egypt’s exporters

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WHAT WE’RE TRACKING TODAY

TODAY: Which routes are worth flying?

Good morning, everyone. China’s zero-tariff window is open to Egyptian exporters — but the hard work of turning preferential access into real orders is just beginning. We look at what it takes to sell into the world's largest consumer market.

Elsewhere, MGX closes a near-USD 50 bn raise to accelerate its AI push, AD Ports tightens its grip on Global Feeder Shipping, and UAE crude exports continue their steady climb back toward pre-war levels.

UAE rebounds

The UAE’s oil exports are at 85% of pre-war levels, according to the International Energy Agency. That’s 4.3 mn bbl / d in early June, up from 1.9 mn bbl / d in March — a more-than-doubling in roughly 10 weeks, before the US-Iran interim agreement even took hold. The infrastructure did what it was built to do — Adcop rerouted crude around Hormuz, the Mandous storage complex kept barrels moving, and Adnoc's own tanker fleet improvised the rest.

The UAE also found ways to keep exports flowing through Hormuz. Some cargoes continued transiting the strait with tankers switching off their transponders, with Adnoc relying on its own fleet, often deploying smaller shuttle tankers before transferring barrels to larger vessels. The company has sold at least 30 mn barrels of spot crude to Asian refiners and trading houses so far in June.

SAR, Italy ink rail partnership agreement

Saudi Arabia and Italy hit the railway tracks: Saudi Arabian Railways (SAR) and Italian State Railways (FS) signed an MoU to develop rail and transit projects across the MENA region, according to a press release. The broad framework covers infrastructure development, network digitalization, and transport decarbonization, while also exploring AI and machine learning initiatives that back construction, design, and operational activities.

Railway expansion seems to be gaining more ground: Spain already lends a hand in Saudi infrastructure. A Saudi-Spanish consortium built and runs the Haramain High-Speed Railway linking Makkah and Madinah, while Talgo has an order from Saudi Railways for 20 more high-speed trains. Meanwhile, Riyadh and Ankara have also expanded rail cooperation, and the cabinet recently approved the Kingdom’s accession to the GCC railway agreement — a 2.1k-km railway project that aims to link the six GCC member states.

A temporary system

Oman puts a framework around Hormuz passage: Muscat has designated temporary shipping corridors north and south of the Strait of Hormuz’s existing Traffic Separation Scheme, which it says is currently unsafe. Under an International Maritime Organization-coordinated plan, vessels will wait in international waters, be grouped, and receive individual instructions on their transit day and assigned route, keeping AIS active and maintaining contact with coastal authorities.

No-charge toll — for now: Passage will remain at no-charge under the arrangement, though talks with Iran on longer-term navigation and the cost of maritime services will continue after the 60-day window in the US-Iran agreement.

The system aligns with the Joint Maritime Information Center guidance — which had opened the Omani-side southern corridor to vessels sailing with AIS live, navigation lights on and VHF open, with US Navy coordination optional. The difference now is that the southern passage is part of a wider IMO-managed evacuation plan rather than an ad hoc route choice — leaving ships with a clearer operating framework, but still subject to phased movements, congestion risks, and continued mine-clearance concerns.

Market watch

Oil prices extended their decline today to trade closer to pre-war levels as stranded tankers exited the Strait of Hormuz, easing supply concerns, Reuters reports. Brent crude futures for August delivery fell USD 0.40 to USD 73.34 / bbl as of 04.36 GMT, while WTI fell USD 0.27 to USD 70.07 / bbl.


The Baltic Index stays under pressure: The Baltic Exchange’s dry bulk index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 1.2% to 2,634 points on Wednesday. The capesize index dropped 2.4% to 3,950 points, while the panamax index slipped 0.7% to 1,693 points. The smaller supramax index rose 1.3% to 2,071 points.

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Trade

Will China’s zero-tariff policy actually boost Egypt’s exports?

Egypt’s exporters have a two-year window to turn China’s lower tariffs into hard sales. The zero-tariff policy for Egypt and 52 other African countries took effect on 1 May, expanding a regime Beijing had previously reserved for least-developed African countries. For Egypt, the challenge is now entirely practical — turning preferential access into real China-bound sales and a narrower trade deficit.

DATA POINT- The test starts from a low base. Egyptian exports to China rose 41.9% in 2025 to roughly USD 819 mn, while imports from China climbed to USD 19.97 bn, leaving us with a trade deficit of over USD 19.15 bn.

Egypt is the bottleneck, not China, Secretary-General of the Egypt-China Chamber of Commerce Diaa Helmy tells us. “China is extending its hand to Egypt — and to any country that can offer an acceptable product,” he said. “The political will to import from Egypt is there, but political will alone is not enough. You need to give it something.”

The challenge: Zero-tariff access can make Egyptian goods more competitive, but exporters still need to understand what Chinese consumers actually want. Customs duties are not usually the main barrier to market entry, industrial analyst Mohamed El Bahi tells EnterpriseAM, explaining that “the most important thing is to understand demand on the other side.” With Egypt’s preferential treatment set to run until April 2028, exporters have a two-year window to show whether the policy is a commercial opening or just another unused trade preference.

China has also recently extended its local-currency swap line with Egypt, raising it to CNY 30 bn (c. USD 4.43 bn) from CNY 18 bn — giving bilateral trade more room to settle outside the USD. El Bahi sees that as the more important lever, saying local-currency settlement cuts out the cost of converting into USD and then into CNY. But the imbalance remains: without more China-bound Egyptian exports, smoother settlement mostly helps an import-heavy trade relationship work more efficiently.

The relationship runs deeper than trade. Egypt received USD 10.2 bn in Chinese Belt and Road (BRI) investment in 2025, according to the BRI Investment Report 2025 (pdf). More than 160 Chinese firms already operate in the country, and recent plans for trade and industrial hubs point to a broader attempt to position Egypt as a supply-chain base between the Red Sea and the Mediterranean — supporting Cairo’s annual export target of USD 145 bn for 2030.

What China will buy

Chinese officials have already pointed to Egyptian fresh citrus as one of the African products entering China under the zero-tariff regime, framing the shipments as early proof that the policy is being put to work. Helmy thinks the market opening can extend beyond one crop, noting “strawberries, and mangoes — they would take them by the ton.”

But citrus also reveals why the story is not just about tariffs: Exporters still need to meet China’s phytosanitary rules, farm and packhouse registration requirements, packaging standards, cold-chain needs, and buyer-distribution demands. To export citrus, producers must maintain the fruit’s internal pulp temperature below 1.6°C during transit to eliminate fruit flies — pointing at the real barrier to entry: advanced cold-chain logistics and heavy capital expenditure, not customs duties.

Other candidates: The next prospects may lie in products where Egypt already has production capacity. Flax, beet pulp, and cotton are early candidates, according to Khaled Milad, head of the Egyptian Commercial Office in Beijing. Head of the Internal Trade Committee of the Importers Division of the Federation of Chambers of Commerce Matta Bishay points to food and beverage, fabrics, cotton products, and engineering goods, while Helmy sees room for higher-value goods such as furniture, leather, ceramics, and finished marble. El Bahi adds pharma and dietary supplements to the list, arguing that even a small foothold in China’s consumer market could lift Egyptian exports sharply.

Turning access into orders

Demand first, or not at all. El Bahi says exporters cannot “hold an internal monologue,” take products to China, and then be surprised they are not competitive. The work starts with demand, competing products, and buyer requirements. Milad provides a tangible example, noting that Egyptian date exports to China are struggling because Chinese consumers are shifting away from high-sugar products. Helmy applies the same logic to compliance in the Chinese market: “The requirements are clear. They are not difficult or impossible — but trying to work around them is a disaster,” noting that exporters risk rejection if they treat the tariff break as a shortcut.

That puts the responsibility on the country’s export machinery. Helmy says export councils, the Cairo Chamber, and the Federation of Egyptian Industries need to identify serious exporters, study what China actually needs, and match companies with the right buyers. A Chinese trade delegation recently met with the Cairo Chamber and the Federation of Chambers, Bishay says, pointing out that exporters still need to follow exhibitions, visit the market, and turn the tariff preference into direct commercial relationships.

“This is not something that happens overnight,” Bishay says, noting the tariff break and CNY settlement could help narrow the imbalance over time, but only once exporters build market knowledge, production capacity, shipping cycles, and buyer relationships. “When you are talking about money flows, containers, shipping, and manufacturing, the cycle is long and slow.” The next test is whether Egypt can use the two-year tariff window to move from scattered interest to repeat orders — and from a China relationship built around imports to one where Egyptian exporters have a clearer lane in, he adds.

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Investment Watch

MGX raises nearly USD 50 bn to accelerate its AI investment push

Abu Dhabi AI investor MGX has raised close to USD 50 bn from regional sovereign funds, global pension funds, and other institutional investors to speed up deployment across AI infrastructure and technology, Bloomberg reports, citing sources it says are familiar with the matter. The vehicle closed in recent weeks and has already begun deploying capital, though no details were disclosed on individual investors or commitments.

A different Gulf model: The raise ranks among the largest dedicated AI investment pools assembled to date and marks an unusually large third-party fundraising effort for Abu Dhabi, whose state investors have traditionally deployed government money.

REMEMBER- This is what MGX was built for: The vehicle was launched to operate more like a global alternative asset manager, raising outside capital to invest alongside backing from Mubadala and G42.

Plenty more to spend: MGX is targeting more than USD 100 bn in assets and plans to deploy as much as USD 10 bn annually over the next few years. The new pool gives it room to pursue larger wagers across frontier models, semiconductors, and data centers as the cost of building AI infrastructure climbs.

The portfolio is already stacked: MGX has backed OpenAI, Anthropic, and xAI and invested alongside BlackRock and Microsoft in global AI infrastructure. It is also exploring a multi-bn-USD acquisition of Singapore-based data-center operator DayOne, which would give it an operating footprint across Southeast Asia, Hong Kong, Japan, and Finland.

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M&A Watch

AD Ports raises its GFS stake to 81%

AD Ports is doubling down on one of the crown jewels in its shipping portfolio. The Abu Dhabi-listed logistics giant lifted its stake in Dubai-based Global Feeder Shipping (GFS) to 81%, spending AED 1.1 bn to acquire an additional 30% holding and tighten its grip on the business, according to a press release (pdf).

The transaction saw AD Ports exercise a call option secured when it first bought a 51% stake in GFS in early 2024. The additional shares were acquired at the same enterprise valuation agreed upon two years ago, implying a total value of AED 3.67 bn for the feeder operator. The logistics giant is using a mix of debt and asset monetization for the transaction.

Why it matters: GFS has a foothold in the GCC, the Indian subcontinent, Africa, eastern Asia, and Mediterranean regions, and AD Ports says it’s one of its most “strategically significant assets.” It transported 2.8 mn TEUs last year, and since AD Ports acquired its initial stake in 2024, GFS has generated cumulative EBITDA of more than AED 1.8 bn. A higher ownership tightens its grip on a firm that widens AD Ports’ network at a time of heightened trade volatility.

GFS proved its value in the past few months: Beyond its operations across key corridors, AD Ports said the firm “through a sustained period of maritime disruption [...] has maintained and expanded trade connectivity where other operators withdrew, ensuring the uninterrupted flow of cargo for customers across the GCC region, whilst serving the Indian subcontinent, Red Sea, Far East, Mediterranean, and Africa regions — reinforcing AD Ports Group’s role as a reliable enabler of trade through volatility.”

IN CONTEXT- The logistics giant has been steadily expanding its footprint in recent months, helping it hedge against ongoing logistics disruptions. Earlier this month, it expanded into Brazil with a USD 835 mn terminal operator acquisition. It’s also been deepening its footprint within Europe’s logistics network, expanding its presence in Africa, and looking to secure access across the Middle Corridor.

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Also on Our Radar

EASA orders additional wing inspections for 16 A380s

Fresh cracks for the superjumbo

Wing-crack check hit 16 A380s: The European Union Aviation Safety Agency (EASA) has directed operators of 16 Airbus A380s to carry out additional detailed inspections after cracks were identified in parts of the wing structure that could compromise its integrity. Fifteen of the aircraft are operated by Emirates — the world’s largest A380 operator, with more than 100 of the type in its fleet — while the remaining jet is flown by Qantas. The four-engine jet left production in 2021 after demand dried up, but Emirates, Qantas, Lufthansa, and Qatar Airways have retained parts of their fleets — leaving operators to absorb the maintenance and compliance burden.


AUGUST

30 August-1 September (Sunday-Tuesday): Air Cargo Middle East, Riyadh, Saudi Arabia.

30 August-1 September (Sunday-Tuesday): Saudi Warehouse and Logistics Expo, Riyadh, Saudi Arabia.

SEPTEMBER

16-17 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

22-24 September (Tuesday-Thursday): Seamless Middle East, Dubai, UAE.

28-30 September (Monday-Wednesday): Transport Logistics Middle East, Riyadh, Saudi Arabia.

OCTOBER

12-14 October (Monday-Wednesday): The Airport Show, Dubai, UAE.

21-22 October (Wednesday-Thursday): Global Ports Forum, Singapore.

26-29 (Monday-Thursday): Air Cargo Forum, Miami, US.

27-29 October (Tuesday-Thursday): Routes World, Riyadh, Saudi Arabia.

NOVEMBER

2-5 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

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