Palm Jumeirah in Dubai, Dubai, United Arab Emirates
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Global trade war launched by US President Donald Trump does not show signs of decline, and Tarife Tit-For-Tat has outlined the main economy, the tanning of the stock market and the darkened appearance for growth.
Economics in question – North America, the European Union and China – face a very uncertain future. But for the Middle East, which has been spared additional levies so far, there are still reasons for caring – as well as the possibilities to use.
The direct impact of tariffs, such as American levies on imports of steel and aluminum, have only minimal impact on the Middle East, economists say. The Bay Region, for example, consisted of approximately 16% of American imports of Aluminum in 2024, led by the United Arab Emirates and Bahrain, the standard economist Mena Economist Carla Slim told CNBC. Although these sectors can be influenced, analysts say, the hit will be smaller.
However, the hit has been growing from a trade war will probably harm the price of oil, the support of the economy of the region. There are also immediate costs in countries whose currencies are related to dollar, such as Saudi Arabia, Uae, Qatar, Oman and Bahrain.
Oil, dollars and debt
The US dollar has been selling from the beginning of the year, making imports for countries with a dollar accessories – which is a challenge for a region that is very dependent on goods from abroad.
The trade tariffs they spend now usually reinforce them more greener – if that happens, the oil becomes more expensive because the goods are traded in dollars. This would give an initial impetus to the countries of the Middle East exporting oil.
But bad news can be in advance as oil demand slows down due to weakened global trade and shipping.
The drilling oil equipment stands on one of the island of Causeway in the manivo oil field, driven by Saudi Aramco, in Manita, Saudi Arabia, on Wednesday, October 3, 2018.
Simon Dawson | Bloomberg | Getty Images
“Macro prospects for Mena (Middle East and North Africa) should be measured by global tariff uncertainty indirectly through oil prices, to the extent that tariff and macro insecurity continue to withdraw the prices of oil,” Slim told CNBC.
Since the shock of oil prices from 2014, many of these economies implemented structural reforms and diversification programs in an effort to reduce their addiction to oil revenue.
“The strengthening of home -demand resistance is still the best lever for the immunization of local economies from global exterior shocks, in our opinion,” Slim said.
Despite the efforts for diversification, oil “is still the biggest individual share of revenue,” said Edward Bell, an act of the main economist of Emirates NBD, based in Dubai.
“For an economy such as UAE, which is very open to trade and acts as a global trade leader through extensive infrastructure and logistics connections, a decrease in global stores will also be an external imposed wind for growth,” Bell said.
The most vulnerable
Stronger Greenback also means that the debt is denominated in dollars more expensive for service. For Lebanon, Jordan and Egypt, which have a particularly high level of external debt, it is a major concern and can cause acute economic pain.
Jordan is the most vulnerable country in the region in tariff wars because of its great dependence on US exports, said James Swanston, an economist of the older emerging market in London’s capital economy. Almost 25% of Jordan’s exports – mostly textiles and jewelry – goes to US markets.
“Jordan’s economy is most exposed to potential tariffs,” Swanston told CNBC.
US President Donald Trump speaks during a meeting with Jordan’s King Abdullah II bin al-Hussein (L) in the oval office of the White House on February 11, 2025 in Washington, DC.
Andrew Hardik | Getty Images
But the country may find something deviation in its diplomatic relationships with Washington-“Insurance was cut with respect to the US aid after a USAID suspension” because of Jordan’s strategic importance in US foreign policy, Swanston noted. “This could suggest that Jordan could negotiate quite easily from tariff influences.”
New trade corridors?
One significant and positive change for the region of Mena brought by the tariff is an incentive for geographically simplified trade corridors.
“For Mena, we think this will add to the incentive of trade corridors in rapid growth, such as GCC-Assia’s trade corridor, which has undergone a long-term growth of 15% and the most benefit,” said the Chartered’s Slim Standard.
She sees growing quantities of trade that increases in parallel increase in financial and investment flows between bay states and Asia, “while Asian companies have placed the presence in the Middle East or expanded existing companies, adding an incentive to organic growth that we have noticed since then [China’s] Belt and road initiative. “
