The Surprising Reason the US and Rwanda Are in a Trade War
Rwanda is one of the world's poorest countries.
For years, people around the world have dropped off tons — literal metric tons — of clothing in boxes and thrift shops as donations every year. Though it doesn’t cost consumers anything to pass their clothing on, it’s costing people in countries like Rwanda, Kenya, Uganda, and Tunisia a lot.
Due to recent Trump administration policy changes, dealing with used clothing from Western countries could cost Rwanda even more.
Globally, the second-hand clothing industry is worth about $3.7 billion, according to the Guardian. Charities and organizations that collect used clothing donations often sell them in their own thrift stores or, more often, sell them in bulk to wholesalers and exports who then ship and sell those goods in vendors in developing countries.
The sale of used clothing is a thriving industry in countries like Rwanda and Tunisia. People from all backgrounds and socioeconomic statuses purchase used goods.
In fact, the second-hand clothing business is so strong in these countries, it’s hindered the growth of local textile and clothing industries. Ghana and Kenya once had bustling garment industries, but these have collapsed in recent decades as textile production shifted elsewhere and the second-hand clothing market picked up, the BBC reported.
To help boost and protect their local industries, several East African countries, including Rwanda and Kenya, recently announced that they would phase out used clothing imports by 2019.
After Rwanda announced its plan to ban used clothing by 2019 and raised import taxes — up to 20 times previous rates — on used goods to deter local vendors from buying second-hand goods to sell, the Trump administration threatened to end the trade support Rwanda receives from the US through the Africa Growth and Opportunity Act (AGOA). Through AGOA, Rwanda and other sub-Saharan African countries are able to export goods to the US without tariffs, helping to boost economic activity.
But, in response to Rwanda’s anticipated ban on used goods and increased tariffs, the Trump administration threatened to impose tariffs on Rwandan goods unless the country reversed its policies by the end of May.
When faced with similar threats, several other East African countries that had threatened to ban used goods and reduced their tariffs on second-hand clothing imported from the US, but Rwanda has not budged.
"We are put in a situation where we have to choose,” President Paul Kagame said in June. “You choose to be a recipient of used clothes ... or choose to grow our textile industries. As far as I am concerned, making the choice is simple."
Rwanda’s tariffs on imported used clothing are set to affect only $17 million of the more than $1 trillion worth of goods the US exports annually, leading experts to criticize the Trump administration’s measure as an overreaction.
Rwanda’s second-hand clothing marketplaces are already seeing changes as a result of the country’s efforts to steer away from its reliance on the second-hand clothing industry, CNN reported. Vendors have observed Rwandans beginning to move away from buying second-hand clothing, opting for new products manufactured in China instead, they told CNN. They said that while they are in favor of the government’s plan to boost domestic production, the effects of that plan have not yet been seen.
Rwandans have criticized the US’ attempt to bully them into changing their policies.
"America shouldn't use clothes to try to patronize Rwanda. We'd rather just stick to our plan, which is to get developed," Media Kamirwa, a used clothing vendor, told CNN. Others have taken social media to voice their frustrations, but many still remain optimistic about the future of their country’s garment industry.
Rwanda gets punished for saying NO to #American hand me downs. "...the US can rise above pettiness. After all, #Rwanda, by attempting to make its own clothes, is doing what we pretend we want of poor countries: to wean themselves off charity." https://t.co/Aek48l8pGI— Ameto (@AmetoAmeto) July 13, 2018
How #Rwanda is going on ? After voracious USA threatened to expel it from #AGOA , for hiking 2nd hand clothing import duties. In other words, Africans aren't allowed to industrialized economies ! But we will be ok, let's stop all those silly agreements/traps & be all #Rwandans— Mo Issa (@Medissa17) July 12, 2018
Rwanda shouldn’t be punished by the US for trying to make their own clothes and their own choices. This is some Bully of the Earth shit https://t.co/UbMxEOZpgW— Jidenna (@Jidenna) July 11, 2018
Rwanda’s strategy to develop the domestic industries by increasing the importation tax on second hand clothes is estimated to create over 25,000 jobs, increase exports to 43 million dollars and decrease imports to 33 million dollars by 2019. #Leadership— African (@ali_naka) June 22, 2018