The Potential Impacts of Trump's Economic Policy on the Arab Region - Nasr Abdel Karim
The Potential Impacts of Trump's Economic Policy on the Arab Region - Nasr Abdel Karim
Less than a hundred days after Trump's inauguration as US President, he plunged the global economy into a major crisis, no less severe than the global financial crisis that had its effects extend for years since its eruption in September 2008. At the beginning of April 2025, Trump fulfilled his pledge to US voters to raise tariffs on imports of goods from almost every country in the world, based on 50% of what these countries impose on their imports from the US, with a minimum of 10%.
Two months before the announcement of the decision, which he called "Liberation Day," US President Donald Trump began implementing his economic vision of imposing tariffs on several countries, starting with Canada, Mexico, and China. The target of these tariffs is China, as tariffs on its exports to the US rose to 145% as part of a tit-for-tat response. China, meanwhile, raised tariffs on its imports from the United States to 85% as part of a reciprocal measure. Thus, it can be claimed that what is unfolding is a fierce "trade war" between China and the United States, which will lead to a restructuring of the global economy and the reformation of trade alliances and blocs worldwide.
This decision included several Arab countries, with the percentage of this increase varying between 10% for imports from the following countries: the United Arab Emirates (UAE), Egypt, Saudi Arabia, Morocco, the Sultanate of Oman, Bahrain, Qatar, Lebanon, Sudan, Yemen, and Kuwait. Higher rates were imposed on other countries, reaching 20% on Jordan, 28% on Tunisia, 30% on Algeria, 31% on Libya, and 39% on Iraq. Syria was the most heavily affected, with customs duties amounting to 41%.
The preceding comes as part of confronting what Trump described as an unfair trade imbalance, referring to the volume of imports and exports in trade with the United States. He expressed optimism that the new tariffs would lead to an American industrial "renaissance," create massive job opportunities, halt the country's commercial exploitation, and generate financial revenues for the US Treasury estimated at $700 billion annually. From a strategic perspective and through this strict protectionist policy, Trump seeks to undermine the efforts of the BRICS group, led by China, to reduce the United States' dominance over the global economy and the dollar's dominance over the currency market. Many view this Trumpian policy as a structural reversal of the globalization and economic liberalism that were led by US efforts in the first half of the 1990s.
Trump's policy included other harmful measures, such as withdrawing from and halting funding for several international agreements and organizations, and ending US assistance to numerous developing and emerging countries, including several Arab countries, which had previously received aid through the United States Agency for International Development (USAID), which was completely shut down. Undoubtedly, these measures will have direct repercussions for many countries that benefit from US funding, whether for international humanitarian organizations or their own budgets.
Following US President Donald Trump's announcement of tariffs on exports to the US from certain countries, questions arose regarding their potential impact on the global economy, including the economies of Arab countries. These tariffs sparked a wave of concern among investors about their potential repercussions for the global economy's future. This was immediately and directly demonstrated by the loss of trillions of dollars in stock markets worldwide in the first three days after the announcement, the severe turmoil in bond markets, the decline of the dollar against major currencies, the unprecedented rise in the price of gold, and a decrease in oil prices to below $60 per barrel.
This policy is expected to lead to a slowdown in global economic growth and global trade by 1% and 0.7%, respectively, which will further pressure the populations of most countries, including shrinking job opportunities, declining wage levels, and a surge in inflation. Naturally, the populations of the less developed and more fragile countries in the South will be the most affected by this policy, as experience from previous global crises has demonstrated.
In the context of this trade war between the world's major economic powers, an important question arises: What is the impact of this war on Arab citizens? In other words, who will bear the brunt of this Trumpian policy?
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