Trump Threatens Jordan's Economy: Tariffs Undermine a Quarter of the Kingdom's Exports

Sada News Economy: U.S. President Donald Trump announced the imposition of tariffs on U.S. imports from Jordan of about 15%, threatening more than 25% of Jordan's exports to the world, at a time when Amman is suffering economically due to increasing political tensions in the region and rising debts.

Economic expert Dr. Amer Al-Shoubki told CNN, "The tariffs come amid extremely difficult economic conditions in Jordan, with debt reaching 115% of GDP, and unemployment rate rising to 22%, along with increasing poverty rates, in addition to the waves of displacement threatened by the war in Gaza."

Trump's Tariffs Threaten a Quarter of Jordan's Exports

Al-Shoubki added, "About 25.7% of Jordan's exports were directed to the U.S. in 2024, and with the tariffs raised to 15%, export costs for Jordanian goods are expected to increase, which could weaken competitiveness and reduce the volume of exports, leading to a decrease in the trade surplus."

He continued, "In 2024, Jordan recorded a trade surplus with the United States of about $1.2 billion, out of exports valued at around $3.11 billion compared to imports of about $1.88 billion," bringing the total trade volume between Jordan and the U.S. to about $5 billion.

In the same context, strategic expert and economic analyst Dr. Adel Qatawneh stated, "It should be noted that the balance of trade between Jordan and the U.S. is in favor of Jordan, and Jordanian exports to the United States are among the most important exports and are characterized by commercial diversity."

Qatawneh added, "Jordanian exports to the American market are concentrated in clothing and textiles, jewelry, fertilizers, pharmaceutical preparations, information technology services, food products, and live animal products, in addition to engineering industries."

Implications of Trump's Tariffs on the Jordanian Labor Market

Qatawneh explained, "The recent U.S. tariffs may lead to an increase in the prices of Jordanian products in the American market, posing a challenge to demand and export contracts, and will put pressure on some Jordanian and international manufacturing companies operating in qualifying industrial zones at the risk of laying off a number of workers."

Al-Shoubki noted, "Clothing and textiles represent the largest sector, accounting for about 70 to 79% of Jordanian exports to the United States, so this sector will be the most vulnerable to the increase in tariffs," adding, "Preliminary estimates suggest that a decrease in exports by 20 to 30% could lead to the loss of between 10,000 and 15,000 jobs in the clothing sector, where women comprise more than 60% of the workforce."

Jordan's Position Compared to Competitors in the U.S. Market

The Jordanian economic expert added, "Despite the tariffs, Jordan remains relatively better than its competitors such as Bangladesh which is subjected to tariffs between 35 and 37%, and Vietnam with 46% tariffs. Jordan also benefits from factors such as quality and stability in trade relations, as well as the "QIZ" industrial areas that allow the export of millions of Jordanian goods to the U.S. market without tariffs, provided certain integration requirements are met."

In the same vein, Qatawneh emphasized that "Jordan enjoys some competitive advantages and is capable of facing economic challenges with great acumen, one of the most prominent advantages being that its business practices are more organized and innovative compared to some countries, along with having close strategic relations with the United States and other countries that may facilitate export procedures, as well as its favorable geographical location for exporting to Europe and neighboring markets."

Qatawneh stated, "Jordanian exports have their value in the Gulf Arab market, the European Union, and other countries around the world, and its industries have a prestigious global status," adding, "These tariffs will represent an opportunity for many countries, including Jordan, to search for new alternatives, form global economic alliances, and sign trade agreements that will significantly contribute to achieving global economic balance."

Solutions for Jordan to Face Tariffs

On his part, economic expert Amer Al-Shoubki noted that there are several solutions for Jordan to confront this situation, including "negotiating with the U.S. administration to convert or reduce the tariffs, especially by highlighting Jordan's flexibility as a strategic partner, benefiting from free trade agreements and QIZ agreements to sustain export flows, and diversifying alternative markets by focusing on Asia, Africa, and Europe to reduce dependency on the U.S. market."

Al-Shoubki further added, "Additionally, there should be a push for local industries toward higher value-added products to compensate for losses, and approaching the World Trade Organization to request a review or dispute resolution if the tariffs conflict with treaty commitments."

It is noteworthy that Jordan has a free trade agreement with the U.S. that came into effect in 2001. Before the agreement, Jordan's annual exports to the U.S. were around $63 million, and the agreement allowed Jordanian exports to increase to approximately $3.7 billion in less than three decades, with the current tariffs threatening to disrupt and perhaps reverse this progress.