Trump’s tariffs could hit Americans hardest

Donald Trump’s imposition of tariffs on US imports from most countries is destructive on the global level and can be expected to impact negatively the Eastern Arab World and North Africa. Ironically, US consumers are likely to be the main victims of Trump’s tariffs. The majority of countries in this region have been charged 10 per cent reciprocal tariff on goods exported to the US. Bahrain, Egypt, Iran, Kuwait, Lebanon, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Turkey, the UAE, and Yemen have been given the lowest rate. Algeria has been charged at 30 per cent as it imposed 59 per cent tariff on US imports. Iraq has attracted a 39 per cent tariff as it charges 78 per cent on US imports, Israel 17 per cent as it imposes 33 per cent on US imports. Jordan must pay 20 per cent as it is accused of charging 40 per cent tariffs on US imports although Amman and Washington signed a free trade agreement in 2000.

Libya is charged 31 per cent in retaliation for 61 per cent tariffs on US goods. Syria – which is under US and international sanctions – has been slammed with 41 per cent tariffs in response to 81 per cent on US imports and Tunisia 28 per cent as it charges 55 per cent in tariffs on US imports. Syria, Iraq, and Algeria are unlikely to suffer greatly as they import few US goods and do not export multiple goods to the US. The formula used to calculate the tariff rates is based on a country’s trade surplus with the US, divided by its total goods exports to the US. This formula has punished Jordan which exports far more in clothing, fertiliser and other items to the US than the US exports to Jordan. Jordan is included among a host of African and Asian countries exporting clothing to the US, which relies on imports for 94 per cent of its clothing. Even when rare items of clothing are manufactured in the US, fabrics and yarn could be imported.

Gulf states run surpluses with the US and have not been targeted by American tariffs beyond the basic 10 per cent. However, investments by these states’ sovereign wealth funds in US stocks and shares could be impacted by a global economic meltdown sparked by Trump’s tariffs. Last week Wall Street suffered the most serious losses since 2020 when Covid struck. Trump’s tariffs have upended the global free trade regime which has for decades bound countries to open their markets for goods by placing low ceilings on tariffs. No tariff and low tariff trade has rationalised global commerce by enabling poorer countries with low wages to export items which would command far higher prices if made in the US and rich countries where wages are high.

Workers in such countries have been shifted to high tech and other firms. This regime has benefited both workers and consumers. By slapping tariffs on most US imports, Trump has doomed tariff-free or low-tariff trade and elicited reciprocal retaliatory responses, risking trade wars which are harmful to the entire world and can cause inflation, a global recession, and antagonism against and isolation of the US. Trump’s 25 per cent tariff on imported cars has a global resonance. The US imports cars and car parts from neighbouring Canada and Mexico as well as Japan, South Korea, Sweden, Germany, and Britain. As the US is a country highly dependent on cars, its own citizens are going to be hit by higher prices and discouraged from buying new cars at short intervals.

Trump believes that tariffs will boost the US economy and return manufacturing plants which have gone abroad due to high US labour and other costs. However, this will take time and could outlast Trump’s reign, leaving US consumers with price rises for imports used on a daily basis. The boost in the prices of morning cups of coffee and tea would impact millions of consumers and restaurant chains. Economists have predicted that tariffs could cost each US family $5,000 extra a year. This is far more than poorer and even middle-class households can afford and could mean that millions of US citizens may stop buying high tariff items which are not necessities.

Retaliatory tariffs could hit US high-tech industries and farmers whose soybeans, maize, fruit and vegetables account for 20 per cent of agricultural production by value and account for 8.4 per cent of goods exported. In 2024, the US sold $176 billion to 189 countries, 47 per cent going to Mexico, Canada, and China. Forty-nine per cent of agricultural exports are to countries with which the US has free trade agreements which could be impacted by Trump’s tariffs. It is ironic that US farmers voted for Trump in the 2024 election. Tariffs are his payback.

US policy in this region has become erratic and destabilising since Donald Trump moved into the White House on January 20th. Trump has again proved a disaster. He has extended uncritical backing for Israel’s Prime Minister Binyamin Netanyahu in his deadly and devastating, never-ending war on Gaza and the occupied West Bank. Israel has also lashed out at Lebanon and has occupied southern Syria and bombed Deraa, Damascus, Hama, and other Syrian sites.

Trump has threatened to bomb Iran, risking regional conflagration. While maintaining his “maximum pressure” sanctions campaign against Iran he has paradoxically called for negotiations over its nuclear programme. Iran has rebuffed direct talks with the US and talks under pressure. Oman has offered to broker negotiations, but the US and Iran have not agreed so far. Tensions remain high.

Trump has repeatedly bombed Yemen, the poorest Arab country, in retaliation for Yemeni Houthi attacks on Red Sea voyages by Israeli vessels and cargo ships bound for the Israeli port of Eilat. US attacks have made life even more impossible for Yemen’s already hard-pressed population.