For over a century, the relationship between Ethiopia and the United States has been significant, marked by economic cooperation and collaboration within international financial institutions. This enduring partnership continues to evolve, reflecting the mutual interests of both nations in fostering stability and development in the Horn of Africa.
According to the Observatory of Economic Complexity (OEC) report, in January 2025 alone, trade between the two nations amounted to over 272 million dollars. The U.S. exported 235 million dollars’ worth of goods, primarily aircraft parts and gas turbines, and imported 37.9 million dollars from Ethiopia, mainly commodities and coffee. Over the past five years, trade has seen an annualized growth rate of 27.6 percent, highlighting the increasing economic engagement.
Recently, in July 2024, the IMF approved a four-year Extended Credit Facility (ECF) arrangement for Ethiopia, amounting to approximately 3.4 billion dollars. This financial package aims to support Ethiopia’s Home-grown Economic Reform (HGER) agenda by addressing macroeconomic imbalances and fostering sustainable and inclusive growth. The U.S. supported this initiative, recognizing Ethiopia’s crucial role in the region.
Moreover, in a significant boost to Ethiopia’s long-standing aspiration to join the World Trade Organization (WTO), the United States has voiced its strong support for the nation’s accession by March 2026.
In this regard, Ethiopia has commenced bilateral market access negotiations with 12 out of 17 countries, including key players like the United States and the European Union.
The Ethiopian government views WTO membership as a historic opportunity to accelerate its economic expansion, attract greater foreign direct investment, and further integrate into the global economy. As the final stages of negotiations approach, the strong support from the United States provides significant momentum towards achieving this pivotal goal.
The U.S expresses its support for Ethiopia’s accession to the WTO. This commitment was underscored during high-level discussions held at the 2025 IMF-World Bank Spring Meetings in Washington, D.C.
This has signalled a strengthening of economic ties between the two nations, coinciding with Ethiopia’s determined progress towards joining the World Trade Organization (WTO).
On the sidelines of the 2025 World Bank- International Monetary Fund Spring Meetings, Ethiopian Finance Minister Ahmed Shide and Ambassador Binalf Andualem engaged in productive bilateral talks with key figures from the US State Department. These included Ambassador Troy Fitrell, Senior Bureau Official leading the Bureau of African Affairs, and Vincent D. Spera, Deputy Assistant Secretary of State for African Affairs.
Minister Ahmed provided a comprehensive overview of Ethiopia’s promising economic outlook, highlighting the numerous investment opportunities available. He also detailed the government’s proactive measures to navigate current global economic headwinds and underscored the significant advancements in Ethiopia’s macroeconomic reform agenda. Particular emphasis was placed on the ongoing market liberalization policies and the adoption of strategies aimed at creating a more attractive environment for Foreign Direct Investment (FDI).
US officials responded positively, commending Ethiopia’s reform achievements, especially its dedication to building fiscal resilience through prudent macroeconomic management and fostering a more business-friendly climate. They further acknowledged the strong alignment in policy between the two countries concerning the deepening of bilateral trade and the promotion of US business investment within Ethiopia.
Encouraging a more robust economic partnership, the US officials urged Ethiopia to actively explore collaboration with US financial institutions such as the US Development Finance Corporation (DFC) and the US EXIM Bank. The aim is to leverage various financing options, including blended financing, to significantly scale up trade and investment opportunities for private US companies seeking to operate in Ethiopia.
Further demonstrating the commitment to strengthening economic collaboration, State Minister of Finance, Eyob Tekalign (PhD), held a separate meeting with Neil J. Beck, Assistant USTR for WTO and Multilateral Affairs at the Office of the U.S. Trade Representative.
During this meeting, Eyob (PhD), provided a crucial update on the significant progress Ethiopia has made in its journey towards WTO accession. He reaffirmed the Ethiopian government’s unwavering commitment to meeting all necessary requirements to achieve WTO membership by March 2026.
Beck, representing the USTR, lauded Ethiopia’s dedicated efforts and conveyed the United States’ strong support for its WTO accession bid. He emphasized the USTR’s keen interest in witnessing Ethiopia’s successful integration into the global trading system.
Both sides concluded their meeting with a mutual agreement to continue their close collaboration and further strengthen their partnership as Ethiopia moves forward in its path towards becoming a WTO member.
This renewed focus on economic partnership comes at a time when the U.S. applies tariff amendments to various nations, including Ethiopia, which currently faces tariffs of ten percent.
Experts suggest that African nations, including Ethiopia, should proactively explore diverse strategies to effectively navigate the evolving tariff landscape and safeguard their trade interests.
Ethiopian renowned economist Zemedeneh Negatu highlighted several positive aspects and opportunities for African nations regarding the U.S. during his recent interview with First Post.
Zemedeneh said that the U.S. will likely maintain a significant presence in strategically important African nations. He specifically pointed to countries where China has a considerable influence and where the U.S. anticipates future substantial interests.
This suggests that major players like Ethiopia, South Africa, Nigeria, and Kenya will likely continue to see US engagement. This sustained presence can foster continued collaboration on various fronts, including trade, security, and development initiatives tailored to mutual benefit.
Furthermore, Zemedeneh emphasized the opportunity for African nations to elevate their engagement with the U.S. by focusing on economic activity and trade. He noted President Trump’s transactional approach, suggesting that increased trade volumes and stronger economic ties could garner greater attention and investment from the U.S. This presents a clear pathway for African countries to proactively shape their relationship with the U.S. by bolstering their economies and becoming more significant trading partners.
He also pointed out the continued importance the U.S. places on security in the Horn of Africa, evidenced by its military base in Djibouti. This indicates that despite potential embassy closures in the region, the U.S. remains invested in the stability of this critical area, particularly concerning the vital Red Sea trade route. This continued security focus could lead to ongoing partnerships and support for regional stability efforts.
Moreover, he underscores the significant opportunity for African countries to enhance their engagement with the U.S. by prioritizing economic growth and trade, aligning with the U.S.’s stated economic interests. This evolving landscape presents a chance for a more focused and mutually beneficial relationship between the U.S. and African nations that actively pursue stronger economic partnerships.
Overall, the burgeoning relationship between Ethiopia and the U.S., underscored by these recent high-level discussions, signals a positive step towards enhanced economic cooperation and mutual benefit.
BY EYUEL KIFLU
THE ETHIOPIAN HERALD THURSDAY 24 JULY 2025
