Rwanda, Tanzania and Uganda have until next week to reverse the decision or face the penalties.
EAC member states agreed two years ago to impose phased ban on used clothing imports over a three-year period beginning 2019.
The three countries argue that the action was essential to their efforts to develop domestic clothing manufacturing industries.
East African nations that are en-route to banning the importation of used clothes may soon pay the price after Washington said it will impose trade penalties in retaliation to what it sees as a blockage of free trade.
The US State Department’s Harry Sullivan, the Africa Bureau acting head of the economic and regional affairs, said Rwanda, Tanzania and Uganda have until next week to reverse the decision or face the penalties.
The East African leaders are expected to meet at the EAC Heads of State Summit on Infrastructure and Health Financing and Development in Kampala, Uganda on February 23.
“I believe the results of the meeting next week will determine how we proceed,” Mr Sullivan said in a conference call with reporters.
East African Community (EAC) member states agreed two years ago to impose phased ban on used clothing imports (known as mitumba) over a three-year period beginning 2019.
Kenya subsequently withdrew from that agreement following US threats to end its eligibility for duty-free clothing exports to the US market under the African Growth and Opportunity Act (Agoa).
Kenyan retreat
US trade officials say that the mitumba ban violates an Agoa stipulation requiring beneficiary countries to eliminate barriers to trade with the America.
Kenya feared the loss of the duty-free and quota-free access to the US, its third largest market.
Rwanda, Tanzania and Uganda — each of which earns far less through Agoa than Kenya — jointly affirmed last July that they intend to proceed with the mitumba ban.
The three countries argued that the action was essential to their efforts to develop domestic clothing manufacturing industries.
The Trump administration disputes that reasoning.
“While we understand the East African Community’s desire to build a domestic textile sector, we firmly believe the EAC ban on imports of used clothing will not achieve that,” Mr Sullivan told reporters.
Making inexpensive mitumba unavailable will adversely affect many people in the three countries, he suggested.
“Leaders or the EAC are saying to consumers of used clothing we are going to take this choice away from you and you will not have access to this market anymore,” he said.
“We question whether consumers of used clothing will be able to afford the new apparel being made in the East African Community market.”
A more effective way of developing domestic clothing industries would entail encouraging middle-class consumers to buy locally made apparel, Mr Sullivan proposed.
An East African fashion industry could “build its brand and market to the growing middle class, which prefers to buy its apparel in shopping malls and other places anyway,” he said.
