While the immediate effects of sweeping US tariffs will fall hardest on major exporters such as China and the European Union, the Middle East and North Africa region will not be untouched. The impacts may be delayed and mostly indirect, but they will test the region’s resilience in the year ahead.
At first glance, most MENA economies appear insulated. The US is not a major trading partner for much of the region. On average, only around 5% of MENA exports go to the US, and much of this consists of oil and gas, which are typically exempt from tariff measures. In the Gulf, direct exposure is even lower. The United Arab Emirates and Saudi Arabia, for instance, send just 2% to 4% of their exports to the US, most of it in hydrocarbons that avoid tariff coverage. Based on these figures, the region seems unlikely to face immediate disruption.
But that view is deceptive. Trade policies of this scale rarely stay contained. Protectionism disrupts global supply chains, shifts investment flows and generates market uncertainty that ripples well beyond the countries directly involved. MENA economies, especially those that rely heavily on hydrocarbons and global capital, are acutely sensitive to these second-order effects.
Energy prices and trade diversion
Oil markets are especially vulnerable. A sustained trade dispute between major economies could weigh on global growth expectations, pushing energy prices lower. For Gulf states, this creates immediate fiscal strain. Saudi Arabia, which is at the centre of the region’s economic transformation efforts, relies heavily on oil export revenue to fund capital projects and maintain macroeconomic stability. A drop in prices complicates budget execution, slows project delivery and increases pressure on public finances. The impact on smaller, more vulnerable economies like Bahrain or Oman would be even more pronounced.
There is also the risk of trade diversion. When large markets such as the US raise tariffs, exporters seek alternative destinations for their goods. That includes regions with open trade regimes and few restrictions – precisely the profile of the Gulf Cooperation Council. Chinese manufacturers facing reduced access to the US may begin offloading excess inventory to Gulf markets, even if it means accepting slimmer margins or losses.
This practice, often described as dumping, is not new. The region experienced it in 2017 when Chinese steel, blocked from the US and EU, found its way into Gulf markets and undercut local producers. There is a risk of history repeating itself, this time across a broader range of sectors.
Some countries will be hit harder than others
Some countries in the region face more concentrated exposure. Jordan sends over a quarter of its exports to the US, with apparel and garments making up the majority. Tariffs could undercut the competitive edge Jordanian producers hold, reducing orders and putting employment in export-dependent sectors at risk.
On the other end of the spectrum, countries like Türkiye may find narrow advantages. US tariffs on EU and Chinese goods could make Turkish products more competitive in the American market. Combined with diversified exports and the possibility of strengthened trade ties with Europe, Türkiye could manage to position itself more favourably, at least in the near term.
Morocco may also see some balance sheet relief from lower oil prices, given its status as a net energy importer. But this would be offset if trade tensions cause broader pressure on global demand for commodities like phosphates and fertilisers, key export products for the country.
Opportunities from the disruption
Yet this period of disruption could also bring opportunity. The GCC’s geography has long made it a key node in global trade, dating back to its role on the ancient Silk Road, where goods, culture and capital flowed between Asia, Africa and Europe. That legacy still shapes its positioning today. As trade routes begin to shift again, the region’s strategic location is once more a strength.
There is growing potential to deepen intra-regional trade, enhance links with emerging markets in sub-Saharan Africa and South Asia and expand trade relations with India. These shifts not only open new markets for Gulf exporters but also offer avenues for greater resilience.
Additionally, trade is no longer just about goods. The region is increasingly investing in digital infrastructure, logistics and alternative payment systems that can reduce reliance on traditional financial channels. These developments could help mitigate external shocks and allow for more autonomous economic positioning.
Taken together, these dynamics suggest a region that will not feel the initial shock of US tariffs. MENA’s exposure lies not in direct trade volumes, but in the fragility of the global environment that sustains its economies. The GCC sits in a shaky position. It has so far maintained a careful balance, growing ties with both Washington and Beijing while steering clear of hard alignment. But as the global trading system becomes more fractured, that neutrality may come under increasing pressure.
The question now is whether that stance can hold in a world where trade is increasingly weaponised. Still, with the right positioning, the region is not just vulnerable. It is also well placed to adapt. If policy-makers can seize new openings while preparing for external shocks, the Middle East may emerge not only resilient, but more globally integrated than before.
Yara Aziz is an Economist, Economic and Monetary Policy Institute, OMFIF.
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