What Happened

On February 24, 2026 — just days after the Supreme Court’s landmark ruling blocking President Trump from using the International Emergency Economic Powers Act (IEEPA) to impose tariffs — the White House invoked Section 122 of the Trade Act of 1974 to impose a blanket 10% tariff on all US imports.

The tariffs took effect on March 4, 2026. Simultaneously, Trump raised tariffs on China by an additional 10%, pushing them to unprecedented levels. This is no longer just a trade war with China — it is a tax on global commerce.

Why the Middle East Should Care

At first glance, US tariffs may seem irrelevant to Gulf nations that primarily export oil. The reality is far more complex.

UAE: The Most Exposed Re-Export Hub

The UAE re-exports over $180 billion in goods annually, much of it transiting through Jebel Ali to global markets including the United States. The new tariffs mean:

• Higher costs on re-exported goods: Products routed through Dubai to the US market now face an additional 10% levy
• Trade route shifts: Some companies may bypass Dubai to export directly, avoiding double tariff exposure
• Pressure on free zones: Jebel Ali and Dubai South could see reduced US-bound shipping volumes

This comes at the worst possible time — Jebel Ali port is already facing partial suspension due to the military escalation in the region.

Saudi Arabia: Diversification Under Pressure

Saudi Arabia’s Vision 2030 aims to reduce oil dependence through economic diversification. But US tariffs threaten that trajectory:

• Petrochemicals: SABIC and Aramco chemicals exports to the US market become 10% more expensive, weakening their competitiveness against domestic American producers
• Aluminum: Ma’aden exports aluminum and phosphates — both now face the tariff barrier
• Foreign investment attraction: US companies that were considering Saudi Arabia as a manufacturing base for American exports may recalculate

Egypt and Jordan: Most Vulnerable

Egypt exports textiles and garments worth over $1.5 billion annually to the US through Qualifying Industrial Zone (QIZ) agreements. The new tariffs directly threaten one of the most critical sources of hard currency for the Egyptian economy.

Jordan faces a similar situation with its textile and pharmaceutical exports that depend on preferential US market access.

The Legal Context: Why Section 122 Is Different

After the Supreme Court closed the IEEPA door, Trump turned to a legal tool unused for decades:

• Section 122 of the Trade Act of 1974 allows the president to impose temporary tariffs not exceeding 15% for 150 days
• No Congressional approval required — but it is time-limited
• Current ceiling at 10% with presidential statements of intent to raise to 15%

This means the current tariffs are temporary — 150 days from February, expiring around July 2026. But the Trump administration may find other legal avenues to extend them.

US-Gulf Trade Impact by the Numbers

US-GCC trade exceeded $50 billion in 2025. The new tariffs affect:

• US imports from the Gulf: Crude oil is historically exempt from tariffs, but petrochemical products, aluminum, and fertilizers are not
• Gulf imports from the US: US tariffs don’t directly affect Gulf imports, but retaliatory tariffs from other nations could raise global commodity prices
• Supply chains: Multinational companies operating in the Gulf that ship components to and from the US will face additional costs

Impact on American and Gulf Consumers

In America

The Tax Foundation estimates that Trump’s tariffs represent the largest tax increase as a percentage of GDP since 1993, averaging an additional $1,500 per US household in 2026. A Washington Post-ABC poll shows 64% of Americans disapprove of the tariff policy.

In the Gulf

Direct impact on Gulf consumers is limited since most GCC nations have not imposed retaliatory tariffs. But indirect effects include:

• Rising prices on goods imported from countries that imposed retaliatory tariffs (Canada, China)
• Slowing global economic growth pressuring oil prices in the medium term
• Declining foreign investment in the region amid rising trade uncertainty

Opportunities Amid the Crisis

Not all the news is bad. The trade war creates opportunities for the Middle East:

• Alternative to China: With tariffs on Chinese products surging dramatically, US companies may seek alternative suppliers — the Gulf could fill the gap in petrochemicals and metals
• Supply chain diversification: Global trade disruption is pushing companies to diversify supply chains, and both the UAE and Saudi Arabia are positioning to attract this shift
• Bilateral negotiations: Gulf states may negotiate special tariff exemptions with Washington, similar to what Canada and Mexico secured for some goods

What to Watch

The coming weeks are critical:

• April 2: Expiration of temporary exemptions for Canadian auto imports and USMCA goods — could reshape trade rules
• July 2026: Section 122 expires — will Trump find a new legal instrument?
• March 17-18: Federal Reserve meeting — how will monetary policy address tariff-driven inflation?
• GCC response: Will Gulf Cooperation Council states announce trade negotiations with Washington?

Tariffs are not just numbers on paper — they are redrawing the map of global trade. And Gulf nations, positioned between East and West, will feel every tremor.

FAQ

Is Gulf oil covered by the tariffs?

No. Crude oil has historically been exempt from US tariffs. However, refined petroleum products and petrochemicals are not exempt.

How long do these tariffs last?

Under Section 122, the maximum is 150 days without Congressional approval — roughly until July 2026. But the administration may find legal mechanisms to extend them.

Will Gulf states impose retaliatory tariffs?

Unlikely. Gulf states depend on the strategic relationship with Washington for defense and technology, and are more likely to negotiate than escalate.