The US’ ongoing tariff onslaught could undermine Arab non-oil USD 22 bn exports to the US, according to a report (pdf) by the United Nations Economic and Social Commission for Western Asia (ESCWA) published on Saturday. The impact of the tariffs is expected to vary from one nation to another, but middle income countries with a bigger share of US-bound exports are set to be hit the hardest.

Where US-MENA trade stood in 2024: The US has maintained a trade surplus with the region since 2015, reaching USD 20 bn in 2024. The trend was largely due to decreased US reliance on Arab oil products. Meanwhile, the region’s non-oil exports to the US have been trending up, rising from USD 14 bn in 2013 to USD 22 bn in 2024 — a threefold jump in the share of the region’s total exports.

The breakdown: Based on its own calculations, ESCWA has sorted Arab nations into three categories according to the impact each is expected to see following the tariffs, assuming the levies announced on 2 April are fully implemented. Here is the breakdown:

  • Jordan, Lebanon, Egypt, Bahrain, Tunisia, and Morocco will see a “significant” impact, as at least 5% of their total exports are US-bound. Jordan especially faces the most direct impact, with around 25% of its exports being US-bound;
  • Oman, the UAE, Saudi Arabia, Algeria, and Qatar will see a “small” impact, with less than 5% of their total exports directly impacted by the tariffs. The UAE's re-export trade with the United States — worth around USD 10 bn — may be at risk due to elevated tariffs on the goods' initial origins;
  • The remaining Arab nations are set to avoid any direct impact from the tariffs, given that they have zero or minimal non-oil US exports.

Indirect headwinds: Exports from Arab economies may suffer cascading, indirect effects from tariff escalation, as the levies are set to dampen demand for goods everywhere, especially from longstanding importers of Arab goods like the EU and China. The EU takes in 72% of Tunisia's and 68% of Morocco's exports, as well as 17% of total Arab exports, while China imports 22% of the GCC countries' oil and chemicals, and 15% of all Arab exports.

A mixed bag for macroeconomic indicators: The region will face direct trade losses with the US, macroeconomic spillovers, and long-term shifts in global value chains, the report finds. Total investments in the Arab region could drop 0.8% y-o-y in 2025, with the GCC area possibly seeing a 1.4% dip. The region’s overall exports are expected to see a marginal 0.01% decline in exports and a 0.2% reduction in imports. On the whole, the Arab world’s imports of US goods will drop by some 28%, but imports from China could see a y-o-y jump of 7% and those from the EU could rise 2%.

As for specific countries: Egypt, Morocco, Jordan, and Tunisia will see a moderate drop in exports of 0.32% y-o-y in 2025, which ESCWA expects will prompt them to leverage their price-competitiveness in the US market and capitalize on offering goods that are affected less drastically by levies. ESCWA predicts that GCC exports will see a more limited impact — a 0.14% y-o-y rise in exports — especially if Saudi Arabia and the UAE lean heavily on competitiveness in transport and logistics.

What to expect from the region? ESCWA expects Arab states to diversify their import sources, with heavier inflows predicted from the EU and China and reduced inflows from the US. ESCWA has pointed out that more pronounced trade between Arab states is possible, particularly among members of the Agadir trade partnership — Egypt, Tunisia, Morocco, and Jordan.

Tags: