With no end in sight for the trade war between the US and China, the world is bracing for a long-term battle between its two biggest economies. But China isn’t the only country that president Trump has accused of unfair trade practices: so has one of the poorest countries, Rwanda. The unlikely catalyst? Used clothing.
In 2016, Rwandan president Paul Kagame decided to raise the tariff on second-hand clothing imports from the US and Europe from $.20 to $2.50 a kilogram. It was part of his “made in Rwanda” initiative, to encourage domestic industry. President Trump called the practice unfair but Rwanda wouldn’t reverse course, so he started taxing Rwandan imports to the U.S. earlier this year.
Kagame promises that long-term, gains from Made in Rwanda will outweigh short-term trade war losses. But so far, for many of the more than 20,000 Rwandans who work in the used clothing industry, it’s hurting business. “In one year, I have lost like half of my business,” Karim Mushumba, a second-hand store owner, told VICE News. Since used clothes are scarcer and more expensive now, Karim has to pass the cost onto his customers. “To tell my customers they should pay double, it needs more explaining…The customers, they don’t come, they don’t come.”
So who is benefitting from Made in Rwanda? So far, it looks like Trump’s greatest economic rival: China. It is already Rwanda’s fifth largest trading partner, and since the U.S. tariffs began, it has planned to invest even more. That includes opening clothing factories in Rwanda. One such company is C&H – a Chinese clothing manufacturer that employs more than 1,000 Rwandan workers in a factory on the outskirts of the capital.
Malou Jontilano, the factory’s manager, says now that there’s a tax break, they plan on opening another project, that will employ about 3,000 workers.
“The government is really giving us 100 percent support.” Jontilano said, “So they are willing even to pay all the necessary taxes incurred, you know without The government C&H is not there.”