Egypt-based Taiwanese businessman sees hope in Trump's tariffs

Cairo , April 22 (CNA) Egypt may offer a way out of the looming uncertainty caused by U.S. President Donald Trump's tariff policy, according to a Taiwanese investor based in the country.

Lo He-chieh (駱和傑), who established Elite Merchandising Corp. (EMC), a textile and ready-made garment factory, in Egypt in 2005, told CNA on Saturday that he received orders for an entire year after Trump announced new reciprocal tariffs on April 2 U.S. time.

Under those tariffs, which were postponed a week later, Egypt was among the countries that would face the lowest 10 percent import duty on goods shipped to the United States, compared, for example, to the 32 percent duties planned for goods from Taiwan.

In addition to the relatively lower import duties facing Egypt, Lo attributed the surge in sales to his factories' location in Alexandria, one of 20 Qualifying Industrial Zones (QIZs) in Egypt that have most benefited the textile and apparel industry.

According to the QIZ protocol signed by Egypt, the United States, and Israel in 2004, textile goods manufactured within the QIZs are exempt from U.S. tariffs as long as at least 11.7 percent of their total value comes from Egypt, the International Trade Administration explained in a 2023 report.

Lo said he moved to Egypt for the opportunities created by the QIZ initiative. The total value of garments produced in his factories includes 10.5 percent of cloth from Israel -- a requirement of the protocol -- and nearly 90 percent of materials and equipment from Asia.

FASH455, a platform specializing in global apparel and textile trade and sourcing, noted that U.S. import tariff rates for textiles and apparel fluctuated between 13 and 15 percent from 2010 to 2024, compared with an average of just 1 to 3 percent for all goods during the same period.

As one of Egypt's oldest industries, the textile and apparel sector contributes around 12 to 15 percent of Egypt's export value and represent the country's third-largest source of foreign exchange.

About 70 percent of the roughly 600 factories in Egypt's QIZs are in the textile and garment sectors.

Having expanded his business at the pace of one factory per year, Lo touted EMC as the largest automated garment manufacturer among Egypt's nearly 7,000 garment factories.

In addition to Egypt's young and affordable labor force, Lo said the country's location at the crossroads of Europe, Asia, and Africa -- along with its numerous trade agreements -- makes it a strategic partner that he expects both Washington and Beijing will compete to court.

Optimistic about Egypt's business potential, Lo encouraged Taiwanese entrepreneurs to invest in the country.

"There were only two Taiwanese firms in Egypt when I called on everyone to form a supply chain here. Now, 20 years later, there are still just two," he said.