Egypt’s Trade Future: Caught Between Trump’s Tariff Storm and Opportunity
Updated 2/18/2025 8:00:00 AM
Egypt's external trade dynamics are currently shaped by a complex mix of exports and imports, influencing its economy. With major exports including agri-food products, cotton, and chemicals, while significant imports include wheat and energy, the trade balance reflects both opportunities and challenges.
Yet, trade policies implemented during the Trump administration, particularly the imposition of tariffs, have reverberated through global markets. This raises the question of whether these policies would affect Egypt directly or indirectly.
Exploring Egypt's strategic partnerships and adaptability to the changing global trade landscape can provide insight into its ability to navigate these emerging challenges.
Egypt-US Trade Dynamics and Trump's Trade Policies
Egypt’s trade with the US is evolving. From January to November 2024, Egypt's imports from the US were valued at around $6.75 billion, 39.6% higher than about $4.8 billion in the same period of 2023, as mentioned in the Central Agency for Public Mobilization and Statistics’ (CAPMAS) monthly bulletin of foreign trade, January 2025 issue.
Key US imports included mineral oils, fuels, oilseeds, fruit oils, medicinal plants, animal feed, aircraft, spacecraft, vehicles, machines, and mechanical devices. Meanwhile, Egypt's exports to the US grew by 13.9% year on year (YoY) to $2 billion in the 11-month period of 2024 from $1.8 billion, according to CAPMAS.
Recently, President Donald Trump has escalated his trade policies, imposing new tariffs to counter perceived trade imbalances. As of February 4th, a 25% tariff now applies to imports from Canada and Mexico, along with a 10% tariff on Canadian energy resources.
Additionally, a 10% tariff on Chinese imports took effect on February 4th as well. On February 13th, Trump ordered the formulation of reciprocal tariffs to match those imposed by other countries on US goods.
These recent tariffs have raised concerns about retaliatory measures from affected countries, as well as how these decisions might directly or indirectly impact Egypt.
On February 13th, Trump warned that BRICS nations, among which Egypt is a member, could face 100% tariffs from the US if they “play games with the dollar." His remarks came in response to discussions about the BRICS countries, namely Brazil, Russia, India, and China, establishing their own currency.
Impact of Trump’s Trade Policies and Sanctions
The trade policies of the Trump administration, particularly tariffs, have reverberated through global markets, indirectly influencing Egypt’s trade environment. Mohamed Riad, a senior economist, tells Arab Finance: “US tariffs on other countries like China can create a ripple effect in global trade, impacting countries like Egypt in several ways.”
“Tariffs often make importing certain goods from high-tariff countries more expensive. China, for example, is a major supplier of goods, such as electronics, machinery, and consumer products,” Rias says.
“With higher tariffs, US businesses may seek alternative suppliers. Egypt can potentially benefit from this if it positions itself as a cost-effective substitute for some of the goods previously imported from China or other affected countries,” he explains.
Meanwhile, Manal Mamdouh, an economic and international trade expert, elaborates to Arab Finance: “It is too early to predict the full impact of Trump's trade policies on Egypt. However, these policies could negatively impact the entire world, triggering a cycle of protectionism and anti-protectionism that may set international trade back for a decade. This would affect Egypt and peers.”
However, Riad warns that Egypt could face pressure if it engages in trade practices the US deems unfair or violating international agreements. “Egypt’s ongoing efforts to diversify its foreign relations, with China, the EU, and African nations, help buffer against potential isolation from any one economic partner,” he adds.
On the other hand, rising US protectionism could present challenges for Egypt. To illustrate this point, Mamdouh says, “Egypt is highly active in environment and climate change initiatives. It hosted COP27 in Sharm El-Sheikh from November 6th to 18th, 2022.”
“One of Egypt’s top priorities is to transition to a green economy by adopting its practices and business models as well as new clean energy. This shift depends heavily on importing advanced technology. So, international trade tensions sparked by Trump's policies could disrupt Egypt’s current and future green transition plans,” she clarifies.
Mamdouh further emphasizes that geopolitics affect energy and gold markets. “Securing Egypt’s energy needs could face different challenges due to critical regional circumstances. What happens when other development plans requiring advanced technologies face similar difficulties? This is a simple question that needs to be addressed,” she points out.
Adapting to Global Trade Dynamics
Yet, Egypt can mitigate the risks of sanctions and tariffs by strengthening partnerships and diversifying its global economic relations. Riad suggests the need to look beyond the US, stating, “Egypt should boost ties with the EU, Africa, and Asia, particularly China and India, to create alternative trade options.”
“Trade agreements like the Africa Continental Free Trade Area (AfCFTA) can give Egypt access to a larger market within the continent. Egypt can also solidify its role in regional organizations, such as the Arab League, the African Union, and the Middle East’s economic forums,” as per Riad.
“By fostering intra-regional trade, Egypt can cushion itself against external sanctions or tariffs, ensuring that regional economic cooperation serves as a buffer,” Riad notes.
The changing global trade dynamics, led by Trumps decisions, require Egypt to adapt. According to Mamdouh, “The key is economic strength by learning from previous global economic crises, reinforcing domestic economic structure, and building institutions based on accountability and transparency.”
Despite the challenges posed by the US trade policies under President Trump, Egypt's trade dynamics are evolving. As Egypt's trade relationship with the US has seen growth in both imports and exports, tariffs and rising protectionism present challenges and opportunities for the future.
By Sarah Samir
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