The “Trump Tariffs” have returned, ushering in a new era of trade protection and uncertainty. This follows the ‘America First Trade Policy‘ issued on January 20 by the US government.
The policy outlines plans for reviews of US trade policies, de minimis thresholds, anti-dumping duties and export controls. Recently, country and sector-wide tariffs were announced, disrupting global trade and leading to increased costs for Middle Eastern (ME) businesses trading with the US.
The ME region has long maintained strong trade ties with the US, with key exports including mineral oils, aluminium, chemicals and industrial goods.
Total export volumes from the region amounted to approximately $76.24bn in 2024.1
The impact of Trump’s tariffs on the region
The US is a top trading partner for most ME countries, with approximately 59 per cent of exports originating from Iraq, Saudi Arabia, Turkey and the UAE. As higher tariffs and stricter trade regulations loom, businesses in the region must brace for uncertainty.
Recent tariff announcements have sparked concern for global trade with sudden announcements of 25 per cent tariffs on Canada and Mexico (which were paused for 30 days) and a 10 per cent tariff on Chinese goods.
While these measures are primarily aimed at North America and China, they could indirectly impact Middle Eastern businesses by disrupting supply chains and increasing costs for industries reliant on US-bound exports.
The US has recently announced sector-specific tariffs on steel and aluminium imports — 25 per cent and 10 per cent, respectively, effective March 12.
These tariffs apply universally to all imports, regardless of origin. The ME region exported $5.6 bn in metals to the US in 2024, though these numbers are much smaller compared to imports from China and Mexico.
This is unlikely to have significant implications, as the tariffs apply to all exporters equally. However, this could create opportunities for ME exporters who may redirect metal supplies to other target markets.
What we could see ahead
Does this mean that ME businesses are safe from sudden tariff increases? No. Other key sectors targeted by the Trump Administration for potential future tariff increases due to the US’s push to boost domestic production. This includes automobiles, consumer goods, materials and industrial goods. For example, $1.9bn of vehicles and transport equipment was exported from the ME region to the US alone, more than half from Turkey.
Additionally, the petrochemical and energy sectors could see reduced demand for the region’s oil and gas as the US expands its domestic energy output and increased competition due to additional reserves available in global markets.
Aside from potential tariff increases, the America First Trade Policy calls for a wider review of US trade relations. From trade agreements to export controls, a complete review will be carried out with recommendations to be delivered in a comprehensive report by April 1.
We will likely see more medium to long-term trade policy changes introduced by the Trump Administration after that date. New protectionist measures could create obstacles, making it harder for key ME exports consumer products and industrial goods to compete in the US market.
The US has trade agreements with Oman, Bahrain, and Jordan. Under the America First Trade Policy, these agreements will be reviewed to ensure they align with US national interests.
While the impact of these agreements remains unclear, renegotiations, adjustments, or exclusions for goods in priority sectors may be possible.
As many ME supply chains are closely tied to global markets, products from China or containing Chinese components are at increasing risk of facing higher tariffs or anti-dumping duties when entering the US. This reflects broader US efforts to address perceived unfair trade practices and reduce dependence on strategic competitors.
Such measures could disrupt trade flows, raise costs, and compel ME businesses to reconsider supply chain strategies to minimise exposure to these risks.
Given the previous Trump presidency and recent media coverage, US tariffs could shift quickly, potentially having a significant impact. Changes to trade agreements may take longer due to the need for reviews and renegotiations unless the US decides to pull out of an agreement entirely.
For ME businesses trading with the US, it is crucial to prepare now for potential shifts in trade policies.
Conducting a detailed review of supply chains, implementing risk management strategies, exploring opportunities for duty mitigation, strengthening customs governance, and leveraging data are essential steps to mitigate the impact of these changes.
The writer is the assistant director – Customs & International Trade, Alvarez & Marsal, Middle East.
