Rwanda is nurturing its garment sector. But domestic demand for locally produced clothes has been stifled by the ubiquity of cheap, secondhand garments imported from Europe and the United States.

Many factories are only running at 40 per cent capacity and secondhand garments, which can sell at well below production costs, are at least partly to blame.

In response, Rwanda increased tariffs on used clothing in July 2016.

These tariffs are now the center of a dispute between the US and Rwanda. If Rwanda continues to tax imported secondhand clothes, the country could lose some of its access to US markets for its exports.

Under the US African Growth and Opportunity Act (AGOA), qualifying African countries are granted duty-free access to the US market. The law which was passed in 2000 is credited for increasing Africa's export sector, with duty-free exports from the continent to the US market almost quadrupling since the law was enacted.

The US has warned Rwanda it would lose some benefits under the act, after Rwanda increased tariffs on secondhand clothes to support its local garment industry.

Selling America's used clothing — much of it donated to charities and the bulk of it originally made outside the United States — is a nearly billion dollar industry. Exports typically end up in poor nations. Africa is a key destination.