The Palm Jumeirah in Dubai, Dubai, United Arab Emirates
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The Global Trade War Triggered by Us President Donald Trump Shows No Sign of Abating, with Tit-For-Tat Tarifs Hammering Major Economies, Tanking Stock Markets and Dimming GrowMing Growth Prospects.
The Economies Concerned – North America, The European Union, and China – face highly uncertain futures. But for the middle East, which has so far been spared of additional leaves, there are still reasons to worry – as well as opportunities to take advantage of.
Direct Impact From Tariffs, Like the Us Leviies on Steel and Aluminum Imports, Have Just A Minimal Impact on the Middle East, Economists say. The gulf region, for instance, accounted for 16% of us aluminum importants in 2024, LED by the United Arab Emirates and Bahrain, Standard Chartered Mena Economist Carla Slime Told CNBC. While that sector may be affected, analysts say, The hit will be minor.
But the blow to growth from a trade war is likely to hurt the price of oil, the mainstay of the region’s economy. There are also immediati costs to countries who currencies are pegged to the dollar, such as saudi arabia, the uae, qatar, oman, and bahrain.
Oil, dollars and debt
The us dollar has been seling off since the start of the year, making importants for counts with dollar pegs more expensive – a challenge for a region highly dependent on goes from abroad.
Trade tarifs implemented by the us typically make the greenback strongeer over time, however – if that happy, oil becomes more expensive, as the commodity is tradeed in dollars. This would give an initial boost to oil-exporting middle East Countries.
But bad news may lie ahead as oil demand slows due to weakened global trade and shipping.
An Oil Drilling Rig Stands on One of the causeway islands in the manifa offshore oilfield, operated by saudi aramco, in manifa, saudi arabia, on wedding, oct. 3, 2018.
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“The Macro Outlook for Mena (Middle East and North Africa) is set to be weighed down by global tariff uncertainty indirectly through oil price, to the expert That that is tariff and macroecroid Continue to be a drag to brent oil prisles, “Slim Told CNBC.
Since the oil price shock of 2014, however, many of that economies have implemented structural reforms and diversification programs in a bid to lessen their dependency on Oil rev the
“Strengthening domestic demand resilience continues to be the best level to immunize Local Economies from Global External Shocks, in our view,” Slim said.
Despite Diversification Eforts, however, oil “Still accounts for the largest single share of income,” said Edward Bell, Acting Chief Economist at Dubai-BANK Emirates nbd.
“For an economy like the uae that is highly open to trade and acts as a global trade facilitator through extended extensive infrastructure and logistics links, a DRP IN Global TRADE WILL ALSO BE ANSTERNALY Imposed headwind to growth, “Bell noted.
Most Vulnerable
A Stronger Greenback also means that dollar-denominated debt is more expensive to service. For lebanon, jordan, and egypt, which have particular high levels of external debt, this is a Major Concern and Cold Cause Account Economic Pain.
Jordan is the most vulnerable country in the region to the tariff wars due to its high expensity dependency on the us, according to james swanston, Senior Emerging Markets Economist at London-Based Capital Economics. Nearly 25% of Jordan’s Exports – Mainly Textiles and Jewelry – Go to American Markets.
“Jordan’s economy is the most exposed to potential tarifs,” Swanston Told CNBC.
Us President Donald Trump Speaks During a Meeting with Jordan’s King Abdullah II BIN II BIN Al-Hussein (L) in the Oval Office of the White House on February 11, 2025 in Washington, dc.
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But the country may find some reprife in its diplomatic ties to washington-“a carve-out was secured with regard to us foreignance folling the suspension of usaid” Strategic Importance in Us Foreign Policy, Swanston Noted. “This might sugged that jordan could negotiate fairly out of tariff impacts.”
New Trade Corridors?
One Significant and Positive Change for the Mena Region BROURHT AbUT by the Tariffs is the push for more geographracally streamlined trade corridors.
“For mena, we think this will add impetus to fast-growth trade corridors, such as the gcc-mon trade corridor which has experienced long-term green of 15% and stands to benefit most Slim.
She Sees Rising Trade Volumes Ushering in a Parallel Increase in Financial and Investment Flows Between the Gulf States and Asia in Particular, “As asian businesses Businesses, adding impetus to the organic growth we’ve observed since (china’s) belt and road initiative. “