Firms report renewed interest from US buyers

By Samuel Abate

Textile and apparel manufacturers in Ethiopia report the start of a revival of demand from buyers in the US as the Trump administration’s tariff bonanza pushes American businesses to reassess their product sourcing.

The textile industry was the hardest hit by Ethiopia’s delisting from the African Growth and Opportunity Act (AGOA) in late 2020, which cut short duty-free benefits and drove American buyers away as part of the Biden administration’s response to human rights violations committed during the northern war.

Four years later, Washington’s tariff regime, which has seen rates of up to 145 percent imposed on goods from 60 countries worldwide, has sparked what could be a surge in business for ailing textile manufacturers.

Ethiopian goods are subject to a 10 percent tariff—a development that government officials, including Prime Minister Abiy Ahmed—have described as a positive opportunity.

Recent updates seem to reinforce the opinion, with firms engaged in textile and apparel manufacturing reporting increased interest from buyers in the US despite the AGOA suspension.

Among them is Huajian Shoe Factory, which used to export products valued at USD 33 million to the US market annually before Ethiopia lost its AGOA privileges. In the years since, the firm has had to cut its workforce from 8,000 to just 1,000 employees.

However, things seem to be looking up.

Nahom Gebremichael, assistant vice president of Huajian, told The Reporter that inquiries from companies looking to collaborate have spiked since the White House announced the tariffs a month ago.

Huajian supplies half of its products to the domestic market under the terms of its agreement with the Ethiopian government, and is preparing to resume exports to the US, according to Nahom.

The surge in demand is likely driven by the relatively higher tariffs placed on manufacturing centers in Asia, he observes.

Hibret Lemma, executive director of the Hawassa Industrial Park Investors Association, stated that manufacturers have been operating at less than half capacity since the AGOA suspension became effective in 2021.

Despite this, businesses leasing space in the flagship industrial park still export up to 60 percent of their products to the US market. The new tariffs, Hibret argues, will help them become more competitive.

He highlighted the high tariffs on Chinese manufacturers in particular, who were the primary competitor in the US market, creates an opening for countries like Ethiopia, which offer low labor costs and already have the necessary infrastructure in place.

“US companies that used to source from Hawassa Industrial Park but stopped after the AGOA ban are now showing interest again following the new tariffs,” said Hibret.

New Wing Addis Shoe Factory, a company with operations in Ethiopia, Italy, and Hong Kong, also reported receiving requests from four US-based firms in the past couple of weeks.

“Due to the AGOA ban, four out of five big US clients stopped ordering from us. But after the recent tariff changes, they’ve expressed renewed interest and asked for product samples,” said Ivanov Mesfin,  deputy manager at the firm.

He urged the government to support manufacturers with tax exemptions, logistics improvements, and other assistance to boost competitiveness in the US market.

During an official visit to Vietnam last week, the PM stated that the 10 percent tariff on Ethiopian goods is relatively low compared to other countries, and could help attract international companies to invest in Ethiopia.

Meanwhile, US President Donald Trump is widely expected to scrap AGOA entirely this year following his stated opposition to renewing it—a position he has maintained since his election campaign.