Beirut, April 19, 2025 - A dramatic escalation in trade protectionism by the United States is significantly impacting Arab economies, placing $22 billion in non-oil exports at risk, according to a policy brief issued today by the United Nations Economic and Social Commission for Western Asia (ESCWA)
Total Arab exports to the U.S. declined from $91 billion in 2013 to $48 billion in 2024-largely due to reduced U.S. crude oil imports. Yet non-oil exports nearly doubled over the same period, climbing from $14 billion to $22 billion, with sectors like textiles, chemicals, aluminum, fertilizers, and electronics driving the growth. That progress is now under serious threat.
Jordan is the most exposed, with nearly 25% of its total exports destined for the U.S. Bahrain, heavily reliant on aluminum and chemical exports to the American market, is also flagged for heightened risk. Meanwhile, the United Arab Emirates faces disruptions to an estimated $10 billion in U.S.-bound re-exports due to tariffs levied on goods originating from third countries.
ESCWA also notes that Gulf Cooperation Council (GCC) economies are facing a recent sharp drop in global oil prices, which is further straining fiscal revenues and testing the resilience of Gulf economies reliant on hydrocarbon exports.
The financial implications are also significant. ESCWA estimates that Egypt, Morocco, Jordan, and Tunisia will pay $114 million more in sovereign interest payments in 2025 due to rising bond yields linked to global investor uncertainty. This increase in borrowing costs threatens to constrain national budgets and delay development spending.
On the demand side, reduced imports from major global partners such as the European Union and China are likely to add pressure. The EU currently absorbs 72% of Tunisia's exports and 68% of Morocco's, while China imports 22% of GCC oil and chemical exports.
Despite the headwinds, ESCWA highlights potential opportunities for trade diversion. Egypt and Morocco could gain U.S. market share as higher tariffs on Chinese and Indian goods make Arab exports more competitive-although the recent 90-day tariff pause (excluding China) may limit the scale of that effect.
To navigate the crisis, ESCWA urges Arab countries to accelerate regional integration. The brief recommends advancing the Pan-Arab Free Trade Area, implementing the GCC Customs Union, and expanding cooperation under the Agadir Agreement. It also calls for renewed investment in logistics infrastructure and regulatory reforms to reposition Arab countries within global value chains.
"Despite the pressures, there is an opportunity here to accelerate structural reforms and deepen resilience," Dr. Dashti added. "The region is at a strategic inflection point."
