The United States has slammed heavy trade sanction on Rwanda by suspending a benefit that allows the African nation to export clothing to the U.S without facing tariffs.
According to the Office of the United States Trade Representative, the suspension will affect $1.5 million in clothes from Rwanda, or 3% of the country’s exports to the United States.
“We regret this outcome and hope it is temporary,” Deputy US Trade Representative C.J. Mahoney said in a statement. “The president’s action today is measured and proportional.”
According to CNN Money, the trade dispute can be traced to 2016, when Rwanda increased import duties on used clothing from the United States from $0.25 to $2.50 per kilogram.
Used clothes were part of US charity donations and have long been a staple of wardrobes in one of the world’s poorest countries which still bears the scars of the horrific 1994 genocide.
But their abundance and popularity stalled development in the local clothing industry, forcing President Paul Kagame to propose banning imports by 2019 and announcing duty hikes. According to him, the duties were needed to boost local producers and prevent his country from being used as a “dumping ground” for used American clothes. The restrictions upset traders in the United States.
The Secondary Materials and Recycled Textiles Association, which represents companies that sell used and recycled clothing, filed a complaint with the US government in 2017 arguing that the trade barriers put thousands of American jobs at risk.
The US warned Rwanda in March that it could lose the right to export duty-free apparel if it failed to roll back its tariffs.
The Office of the United States Trade Representative said in its statement Monday that Rwanda would retain other benefits under the African Growth and Opportunity Act (AGOA), which allows sub-Saharan African countries to export to the United States without facing tariffs.
“The president’s action does not affect the vast majority of Rwanda’s exports to the United States,” Mahoney added. “We look forward to working with Rwanda to resolve this issue so that benefits in the apparel sector may be restored.”
The government of Rwanda has however pledged to help exporters affected by the US decision by compensating them for new US taxes.