Article Link: https://www.bbc.com/news/business-54164397
Rwanda makes clothing and purchases used clothing from other countries (mainly the U.S). The Rwandan people were gravitating toward used clothing due to the cheaper costs. As a result, garment factories there were losing money. In response, Rwanda put tariffs in place ($4 per kilogram) on imports of used clothing in 2018. ¨The U.S. responded by putting tariffs of 30% on Rwandan clothing, where there had previously been none.¨ Despite these new tariffs, Rwanda did temporarily get the desired effect of having more Rwandans purchase the locally-made clothes, but there were several negative effects of this. One of them being, the Chinese moving in and ultimately did the same thing that the U.S had done. China started importing new clothing which was cheaper than Rwandan made clothing, which more Rwandans bought. Some say, the garment industry in Rwanda cannot compete because it is too small and their prices are too high and Chinese clothing is more desirable.
This ultimately puts Rwanda and U.S in a bad position, but China benefits economically and in terms of influence. The Rwandan garment industry is not in a better position and the U.S has given China an opportunity to expand into areas previously controlled by the U.S. This is another win for the Chinese on increasing their economy and the U.S losing influence in Africa. If the U.S does choose to resolve this issue, in my opinion, they should offer something that the Chinese are not (e.g. trading goods), and also lowering the costs of the tariffs/taxes put on Rwanda for the clothing. In return, the U.S. would ask the Rwandan government to completely cut ties with China. If the U.S does return it should not simply focus on the economic aspects and how much profit could be made, but also on influence which could be gained in the region.
This article demonstrates several ideas we have already covered in class. One being, direct cause-and effect. When the U.S upped the price of tariffs on Rwanda, China saw it as an opportunity to come in and ship clothing for a lower cost to Rwanda. Also, it is a global level issue from United States and China as they compete for economic gains and political influence.