US takes trade action against Rwanda – impact to Rwanda – minimal.


As I blogged about at the end of May this year, the US and Rwanda was headed toward a trade war due to Rwanda imposing a $2.50 per kilogram duty on used clothing. The reason for the tariffs on second hand goods to Rwanda was a response from the Rwandan government to improve their domestic textile industry by making second hand clothes more expensive than new Rwandan-made clothing. In response to the tariffs of $2.50 per kilogram of used clothes to Rwanda, the Secondary Materials and Recycled Textiles Association (SMART), a US-based organization which represents companies that collect and resell Americans’ used clothing, complained the Rwanda tariffs will have a big impact on the $1 billion used clothing export industry.

The US threatened Rwanda with losing AGOA benefits for Rwanda textile exports to the US if the Rwanda duties on used clothing was not ended. With a May 28th deadline for Rwanda to reverse course, the US suspended duty-free benefits for apparel from Rwanda on July 31st.

While the Rwandan tariffs did have the impact of raising the price of used garments to be the same as Rwandan made textiles, the Deutsche Welle reports that the unintended consequence is a flood of new, cheap clothes from China that are priced below Rwandan-made textiles. It seems the impact on Rwanda is very minor as the total export value to the US was only $1.19 million for textiles. For the companies impacted, most have sought new markets in Europe instead.

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