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The U.S. is in a trade war with Rwanda over used clothes

Secondhand shirts in Rwanda have sparked a trade war between one of the world's poorest countries and its richest

by Amel Guettatfi and Julia Lindau
Sep 19 2018, 5:52pm

KIGALI, Rwanda — The annals of history are rife with examples of things man has gone to war over: money, religion, and love, to name but a few. Thanks to a new trade war between the U.S. and Rwanda, historians can add another, unlikely catalyst to the list: used clothing.

It began in 2016, when Rwandan President Paul Kagame decided to raise the tariff on secondhand clothing imports from the U.S. and Europe, from 20 cents to $2.50 a kilogram, part of a "Made in Rwanda" initiative to encourage domestic industry. President Trump called the practice unfair, but Rwanda declined to reverse course — so he started taxing Rwandan imports to the U.S. earlier this year.

Kagame promises that the long-term gains from "Made in Rwanda" will outweigh any 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 secondhand store owner, told VICE News. Since used clothes are scarcer and more expensive now, Karim has to pass the cost on to 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 benefiting from "Made in Rwanda?"

At the moment, it looks like Trump's greatest economic rival: China. The country is already Rwanda's fifth-largest trading partner, and thanks to the U.S. tariffs, it plans to invest even more. That includes opening clothing factories in Rwanda, like 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're planning 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.”

This segment originally aired September 12, 2018 on VICE News Tonight on HBO.