Are Arab Countries Afraid to Negotiate with Trump Over Tariffs?

SadaNews - On Wednesday, U.S. President Donald Trump announced a new round of reciprocal tariffs set to take effect on August 1, impacting several Arab countries, including Iraq, Algeria, Libya, and Tunisia.

However, until now, no Arab country has taken the initiative to engage in official direct negotiations with Washington to mitigate or abolish the tariffs announced by President Trump's administration on April 2.

Despite extending the deadline Trump set for 90 days, which he said more than 75 countries have utilized to negotiate trade barriers until August 1, the Arab stance remains completely different from that of other countries. For instance, the United Kingdom, China, and Vietnam have already reached agreements with Washington, and several countries are close to finalizing tariff deals with the U.S. president in the coming days or weeks.

The pressing question now is: Why have no Arab countries rushed to negotiate in the past period? Is it due to an implicit confidence in the possibility of reaching a deal before August 1? Or do these tariffs not represent a significant burden on the economies of the region?

1) What is the size of the tariffs imposed by Trump on Arab countries, and who is the most affected?

According to the latest tariff updates, Trump imposed reciprocal tariffs of 30% on Iraq, Algeria, and Libya, and 25% on Tunisia.

Meanwhile, the tariff rates imposed by Trump on other Arab countries during what he called "Liberation Day" varied. The minimum reciprocal tariff was imposed on most Arab countries at 10%, applicable to Saudi Arabia, Egypt, the UAE, and the rest of the region except for Jordan (20%) and Syria (41%), the Arab country with the highest tariffs so far.

The United Nations Economic and Social Commission for Western Asia (ESCWA) warned of the repercussions of these tariffs, which threaten non-oil Arab exports to the U.S. valued at 22 billion dollars.

Among the countries expected to face significant economic pressures due to these policies are Bahrain, Egypt, Jordan, Lebanon, Morocco, and Tunisia. Jordan is the most affected, as its exports to the United States account for approximately 25% of its total global exports, placing it in a vulnerable situation, according to ESCWA.

Bahrain faces additional economic challenges due to its heavy reliance on the U.S. market for exporting aluminum and chemicals, which are among the sectors directly targeted by these tariffs.

The UAE also faces risks threatening its re-export market to the United States, valued at about 10 billion dollars, especially with high tariffs imposed on goods coming from their original sources, according to the ESCWA report.

The UAE and Bahrain were among the largest exporters of aluminum to the U.S. in 2024, according to "Bloomberg" data. The UAE ranked second with exports of about 1 billion dollars, while Bahrain ranked sixth with exports valued at approximately 500 million dollars. Trump recently imposed a decision to apply a 25% tariff on all aluminum and steel imports.

2) What is the size of trade between Arab countries and the United States?

Arab exports to the United States have decreased from 91 billion dollars in 2013 (equivalent to 6% of the region's total exports) to only 48 billion dollars in 2024 (about 3.5%), primarily due to a reduction in U.S. imports of crude oil and petroleum products.

Nevertheless, non-oil exports from Arab countries to the United States doubled during the same period, rising from 14 billion dollars to 22 billion dollars in 2024, indicating a growing economic diversification now threatened by new protectionist measures, according to ESCWA.

The new tariffs imposed by the United States on Arab goods will have a direct impact on these non-oil exports to the U.S. market, while oil and petroleum product exports are exempt from the new tariff increases, according to ESCWA.

The United States has maintained a trade surplus with the Arab region since 2015, amounting to about 20 billion dollars in 2024. Most Arab countries have a medium or low share of exports to the U.S. market, except for Jordan. Energy and mineral products dominate Arab exports to the United States.

Trade between Saudi Arabia and the United States amounted to 32.5 billion dollars in 2024, with Saudi exports to the U.S. reaching 12.8 billion dollars, primarily consisting of metals, fertilizers, and organic chemicals, while imports from the U.S. totaled 19.7 billion dollars, including machinery, vehicles, and medical devices.

The Gulf States accounted for 54% of the total trade volume between the U.S. and Middle Eastern countries during the first quarter of 2025, totaling 34.7 billion dollars.

According to U.S. Census Bureau data, the total trade value between the United States and Gulf Cooperation Council countries reached 18.8 billion dollars during the first three months of this year. The UAE topped the Gulf countries as the largest trading partner of the U.S. with a trade value of 8.8 billion dollars in the first quarter, followed by Saudi Arabia at 5.8 billion dollars.

Egypt recorded the highest trade growth rate with the U.S. in the Middle East at 69%. Trade between Kuwait and the U.S. recorded the largest growth among U.S. partners in the Gulf, with an increase of 59% compared to the first quarter of 2024.

3) Why have no Arab countries sought to negotiate with Trump to eliminate these tariffs?

Analysts believe that the absence of Arab negotiations with Trump's administration regarding the tariffs is due to their relatively low rates in most countries to a minimum (10%), and the exemption of oil products, in addition to the presence of agreements that mitigate the impact or the weakness of exports to the U.S. market. However, Trump’s warnings issued yesterday to the three countries (Iraq, Algeria, and Libya) and previously to Tunisia may prompt these countries to act sooner.

In the UAE, sources revealed to "Reuters" that informal discussions were held with Washington to ease tariffs on steel and aluminum exports, but both parties have not announced anything officially yet.

As for Egypt, it is focusing on amending the "QIZ" agreement that exempts half of its exports from U.S. tariffs, while official sources speaking to "Asharq" believe that market diversification strengthens Cairo's position.

Dr. Mohamed Anis, a member of the Egyptian Association for Economy and Legislation, told "Asharq" that "the trade volume between Egypt and the U.S. is less than 10 billion dollars, and there is a surplus in favor of Washington, making negotiations with Cairo a lower priority."

He added that "half of the exports are protected by the QIZ agreement, and the other half can absorb its tariffs, as Egypt's competitors pay higher rates."

In Morocco, economist Youssef Karawi explained that "the imposed tariffs do not warrant a negotiation initiative," indicating that "Rabat prefers to address the trade deficit with Washington through long-term tools instead of engaging in complex negotiations."

In Iraq, Prime Minister Advisor Dr. Muthar Mohammed Saleh told "Asharq" that his country is not among the U.S.'s main industrial partners and that its current exports are limited to crude oil, which is exempt from tariffs.

Meanwhile, financial expert Dr. Safwan Qusai Abdul Halim believes that "Iraq needs to define its trade relationship with Washington from now on, especially as it looks to export phosphate and cement in the future," noting that "the international environment may offer export opportunities for Iraq if clear customs rules are arranged early."

In Bahrain, Dr. Hassan Hassan, a senior fellow at the International Institute for Strategic Studies, told "Asharq" that "U.S. tariffs are among the lowest globally, and it is unproductive to negotiate with a gigantic economy like the U.S.," adding that "the free trade agreement signed in 2004 did not protect Bahrain, as Trump's administration has exceeded the principles of the international trading system."

Also, despite the political significance of the decision, Trump’s Gulf tour following the announcement, which included Saudi Arabia, Qatar, and the UAE, resulted in investment pledges worth 3.6 trillion dollars, reducing the need for direct tariff negotiations.

Regarding Jordan, one of the Arab countries most threatened by U.S. tariffs, Dr. Raed Mahmoud al-Tal, head of the Department of Economics at the University of Jordan, stated that "Jordan's hesitation to negotiate stems from its reliance on the free trade agreement since 2001 and the government's desire to avoid entering sensitive negotiations with a tough administration."

He added that "the affected Jordanian sectors are limited, but there is an indirect impact represented in reduced competitiveness within supply chains." He continued: "Jordan may later seek to open a diplomatic negotiation file, but canceling tariffs after they are enacted seems difficult," considering that "the terms of the trade agreement could be used to challenge the inclusion of certain products if their impact on the U.S. market is proven limited."

Observers warn that the absence of negotiations may also reflect some Arab countries' oblivion to the medium-term risks of tariffs, especially if they turn into a permanent approach that threatens the competitiveness of future exports.

4) Are there Arab countries that could benefit from U.S. tariffs?

Yes, some Arab countries may try to benefit from the high tariffs imposed on countries like China and are working hard to relocate Chinese factories to operate and export from them to the U.S. market under a low tariff rate.

For example, the tariffs may allow Egyptian and Moroccan exports to enter European and American markets, especially with the strong industrial base in both countries, according to Ahmed Shams Eldin, head of the research sector at "EFG" in a previous conversation with "Asharq".

The head of the research department also clarified that Egypt has strong opportunities in manufacturing and outsourcing due to its competitive advantage in Western markets, as well as the situation in Morocco, particularly in the automotive industry.

The same applies to Gulf countries, as there has been significant development in non-oil economies such as electric vehicle production and other sectors unrelated to oil. Shams Eldin concluded: "The non-oil economy has become the engine that has driven the growth of both Saudi Arabia and the UAE over the last five years."

5) What are the expectations now after Trump’s warning to 4 Arab countries?

The Trump administration may move towards imposing tariffs of up to 30% on the exports of the four Arab countries he warned in the past two days, especially if they do not take any negotiating action or offer concessions.

Initially, the U.S. president stated that he did not intend to extend the deadline after July 9, before issuing a later decision to extend it to August 1, and reiterated his threat to end negotiations and impose tariff rates on several countries starting next month, raising the tariff ceiling to 70%.

There are various expectations regarding the Arab countries that he did not mention in his speeches over the past 48 hours, including the continuation of tariffs at their current rates without change as imposed on April 2. Some Arab countries may begin to open official negotiation channels with the U.S. administration to request exemptions or reduce tariffs, such as the UAE and Bahrain (the most affected by aluminum tariffs).

While other countries may maintain their stagnant position without entering into negotiations with the Trump administration and yielding to the new tariffs, especially if their impact is not severely negative.