JEDDAH: The US’s imposition of tariffs on several Middle Eastern nations signals a shift in trade dynamics, challenging traditional alliances while opening doors for new economic partnerships and diversification in the region.

Gulf Cooperation Council nations, along with Egypt, Morocco, Lebanon and Sudan, are facing a 10 percent US tariff on exports to the US under Trump’s new trade policy, targeting what the president described as long-standing unfair practices.

While GCC states were spared the steepest penalties, other Arab countries were hit harder: Syria with 41 percent, Iraq with 39 percent, Libya with 31 percent and Algeria with 30 percent. 

Tunisia and Jordan received 28 percent and 20 percent tariffs, respectively.

Despite the levies being on US imports, most GCC countries have trade deficits with America, importing more than they export.

According to the Office of the US Trade Representative, goods imports from MENA to America totaled $61.3 billion in 2024, down 1.6 percent, or $1 billion, from 2023. The US goods trade surplus with the Middle East was $19.1 billion in 2024, a 39.8 percent increase, or $5.4 billion, on 2023.

Strategic intent signals

When the US imposes tariffs, the impact extends far beyond the balance sheets of exporters and importers. These policy tools, while often presented as economic levers, also serve as clear messages about strategic intent.

The most recent round of US tariffs on a variety of goods has sparked concern across global markets, including among trade experts in the Middle East.

Tamer Al-Sayed, chief financial officer at the Future Investment Initiative Institute, told Arab News that the move was part of a broader shift in tone, saying: “Tariffs have never just been about taxes. They are signals. And the message coming from Washington right now is: ‘We’re prioritizing domestic protection.’”

While such a stance may make political sense in the White House, Al-Sayed believes it introduces a layer of complexity to long-standing economic ties between the US and the Gulf region.Historically, he said, the region has had strong energy and defense trade channels with the US, but in areas such as petrochemicals, aluminum and even some tech-linked components, there is some discomfort. 

Tariffs have never just been about taxes. They are signals. And the message coming from Washington right now is: ‘We’re prioritizing domestic protection.’

Tamer Al-Sayed, chief financial officer at the Future Investment Initiative Institute

He emphasized that the issue extends beyond immediate cost increases, highlighting a broader shift in the tone of the relationship — from collaborative to transactional.

Describing the scene in the region, he noted that it is only natural for businesses and governments to begin asking “tough” questions — such as whether they are overly exposed to a single market, and how they can future-proof their trade strategies.

“That might lead to a bit of a cooling-off in certain sectors while we explore new or alternative partnerships,” he said.

Minor impact on exports, rising diplomatic tensions

Yaseen Ghulam, an associate professor of economics and director of research at Al-Yamamah University, Riyadh, told Arab News that US diplomatic relations with their allies in the region are under significant strain due to blanket tariffs on goods imported from these countries.

“Some countries are impacted more due to higher rates and a larger volume of trade. When it comes to Middle Eastern countries, the negative direct impact is not significant,” Ghulam said.

However, he said that a tariff of 10 percent on exports to the US will not significantly change their volume of exports to the US.

Ghulam pointed out that incidents and related shocks such as these are not common when one looks at the history of the international trade mechanism developed after World War II. 

“The superpowers have always had the muscle to press a reset button. However, the speed and magnitude with which these tariffs have been introduced by the US is in fact unparalleled,” he said.

The economist added that the US is a country that has dominated in politics and trade, but senses its dominance is in decline due to emerging larger trading powers such as China.

Domestically, he added, the significant trade deficit the US has had over an extended period has been cited as a reason for the government’s inability to upgrade infrastructure and services over the past two decades. He believes that the global community must address US concerns while preparing for a changed trade regime.

“There is also a need for dialogue to come up with arrangements that do not hurt international trade and global consumers, and that also do not give unfair advantages to some countries that have used protective policies for various economic sectors, such as agriculture and automobile manufacture, to the detriment of some exporting countries such as the US,” Ghulam said.

New regional opportunities

Among the sectors feeling the brunt of the US tariffs are aluminum and petrochemicals — industries in which Gulf countries such as Bahrain and the UAE have long held competitive advantages.

According to Al-Sayed, these sectors are now grappling with diminishing price competitiveness in global markets with countries such as Bahrain and the UAE having built competitive export ecosystems around these industries.

“When tariffs hit, our price advantage starts to erode, and in a global market, that matters. But it is not all negative. Whenever there is a shake-up like this, new opportunities emerge. For example, sectors like agribusiness or food processing in the region could benefit as supply chains adjust and prices in the US climb,” he said.

The FII official added that he sees a potential boost in re-export and logistics hubs such as Jebel Ali. “They can step in to serve rerouted flows,” he said.

Al-Sayed also highlighted the growing promise of the region’s tech and green economy sectors. “As global players look to hedge their trade exposure, they will want partners who are agile, well-positioned, and policy-stable. That is where we have an edge,” he said.

Tariffs amid diversification, regional integration shift

Countries in the region are increasingly prioritizing economic diversification to lessen their dependence on traditional income sources.

While US tariffs have not created an immediate need for diversification, they have certainly accelerated the process. “Diversification did not start with these tariffs. It is just accelerating now,” said Al-Sayed.

He pointed out that there is also a shift toward a more regional integration, with the GCC states starting to tighten their economic cooperation. 

“In times like these, neighbors matter. So, the US will remain a key player, but the region is clearly tilting toward a more balanced, multi-polar trade approach,” he said.

Moreover, he added, these countries, especially under frameworks such as Vision 2030, have been on a mission to reduce overreliance on single markets. 

“The current tariff situation just reinforces that urgency. You will notice stronger trade missions and deals being signed with China, India, Southeast Asia, and increasingly with Africa,” he said.

Rise of strategic, sector-specific alliances

Looking ahead, Al-Sayed foresees a wave of targeted, sector-specific trade agreements taking shape across the globe. Green energy partnerships with Europe, digital and AI cooperation with Asia, and food security initiatives with African nations, are all part of this evolving trade blueprint.

Al-Sayed said that there is a new mindset emerging, particularly among Gulf sovereign funds and trade ministries, focused not only on importing and exporting but also on influence, access and long-term positioning.

“So, when we invest, we are thinking what market this opens and what network it unlocks. For example, do not be surprised to see strategic joint ventures in logistics, tech manufacturing, or even rare earths, where we co-own supply chains rather than just buy from them,” he said.

The financial expert said that the world is rebalancing, and tariffs may seem like small policy tools, but their aftershocks are redrawing global trade maps. “The Middle East, if it plays this right, could come out not just as a player but as a connector,” Al-Sayed said.

RIYADH: Startups across the Middle East, North Africa and South Asia are securing fresh capital and expanding into new markets, signaling strong investor confidence.

Saudi-based business-to-business marketplace Sary has announced it will merge with Bangladesh’s commerce platform ShopUp to create the SILQ Group, a newly formed entity aiming to transform cross-border trade across South Asia and the Gulf.

The merger is supported by a $110 million funding package comprising an equity investment and a financing facility dedicated to SILQ Financial, the group’s financial services arm.

The funding round includes participation from a broad investor base, led by Sanabil Investments, and joined by Valar Ventures, Flourish Ventures and STV, as well as MSA Capital, VSQ and Rocketship VC. Wafra Investment, Peak XV and Prosus were also involved, along with Tiger Global, Endeavor Catalyst and Raed Ventures.

Qatar Development Bank also participated as a new investor, as SILQ sets its sights on establishing a significant presence in the Qatari market.

This strategic alliance signals a significant step toward deeper commercial integration between the two regions, aiming to serve micro-, small-, and medium-sized enterprises with improved access to global supply chains and embedded financial tools.

Founded in 2018 by Mohammed Al-Dossary and Khaled Al-Siari, Sary connects small retailers and merchants with manufacturers and lenders across Saudi Arabia and the Gulf region.

ShopUp, founded in 2016 by Afeef Zaman, offers similar services in Bangladesh, acting as a crucial link between mills, brands, and neighborhood retailers.

The newly formed SILQ Group combines these complementary regional networks, technology stacks, and market expertise. 

“Through this merger, we’re entering what’s set to become one of the world’s largest trade corridors — projected to reach $682 billion,” said Zaman, now CEO of SILQ Group.

“We’re in the front seat to serve some of the most exciting, fast-growing economies that are set to shape global consumption in the coming decades, giving them greater access to products from around the world.” He added SILQ will focus on eliminating friction in the B2B supply chain and enabling MSMEs with better technology and financial inclusion.

Al-Dossary, now CEO of SILQ Financial, said: “By merging our strengths, we’re not just expanding our reach — we’re revolutionizing how digital commerce serves Gulf’s merchants and South Asia manufacturers.”

He added: “This alliance brings together the best of both worlds — deep regional expertise and world-class technology to empower every business in our ecosystem where financial services are a cornerstone.”

Language AI platform STUCK? secures six-figure pre-seed round

Saudi-based artificial intelligence startup STUCK?, which offers real-time language support for English and Arabic content, has raised a six-figure pre-seed investment round to advance its product and market reach.

The funding was led by the UK-based Mena Tech Fund, with participation from the KAUST Innovation Fund and several angel investors from Saudi Arabia.

Founded in 2022 by Asmaa Naga, STUCK? delivers AI-powered language assistance to content teams, offering contextual help in writing, editing and translation.

The company aims to remove language barriers for both native and non-native speakers operating in bilingual business environments.

STUCK? provides services via an AI-first platform that combines natural language processing with generative tools optimized for business communication and brand tone consistency.

With this latest round, STUCK? plans to scale its engineering capabilities.

Rabbit launches in Saudi Arabia with Riyadh regional HQ

Cairo-born quick commerce startup Rabbit has expanded its operations to Saudi Arabia by opening a regional headquarters in Riyadh.

The move marks Rabbit’s first major international market entry, as it looks to replicate its rapid delivery model — offering grocery and everyday essentials in under 20 minutes — within the Kingdom’s growing e-commerce landscape.

Founded in 2021 by Ahmed Yousry, Walid Shabana, Ismail Hafezz and Tarek El-Geresy, Rabbit leverages a network of dark stores and a proprietary logistics platform to optimize ultra-fast last-mile delivery.

In Egypt, Rabbit has positioned itself as a leader in q-commerce with its tech-driven approach, and it now seeks to replicate this success in the Gulf by localizing its services for Saudi consumers. 

We pride ourselves on being a hyperlocal company, bringing our cutting-edge tech and experience to transform the grocery shopping experience for Saudi households.

Ahmad Yousry, Rabbit co-founder and CEO

Rabbit’s expansion is supported by funding from investors including Lorax Capital Partners, Global Ventures, Raed Ventures, and Beltone Venture Capital.

Existing backers Global Founders Capital, Goodwater Capital, Hub71, Simple Capital and Foundation Ventures have also reaffirmed their commitment to the company’s growth strategy.

“We are delighted to announce Rabbit’s expansion into the Kingdom,” said co-founder and CEO Ahmad Yousry.

“We pride ourselves on being a hyperlocal company, bringing our cutting-edge tech and experience to transform the grocery shopping experience for Saudi households and delivering the best products — especially local favorites — in just 20 minutes. We’re building Rabbit Saudi for Saudis by Saudi hands.”

Sellou raises seed funding round at $3m valuation

Bahrain-based social commerce startup Sellou has closed a seed funding round at a $3 million valuation, aimed at scaling its video-powered marketplace platform across the MENA region.

Founded by Salman Al-Khalifa, Sellou allows users to create short, interactive videos to showcase and sell a wide range of products — ranging from handmade goods to general merchandise.

The platform is part of a rising wave of social commerce innovation, particularly in the Middle East, where mobile-first consumer behavior is driving the adoption of new retail formats.

Sellou’s app enables sellers to build storefronts with personalized video content and engage buyers through direct messaging, streamlining the e-commerce experience for both sides.

With fresh capital, Sellou intends to invest in expanding its engineering team, enhancing creator tools and entering new markets across the region.

Rentify raises $500k to grow rental payment platform

UAE-based proptech and fintech company Rentify has raised $500,000 in seed funding to accelerate the development of its rental payment and management platform.

The startup was founded in 2025 by Rashed Hareb and Rajneel Kumar with a vision to digitize rental transactions and improve transparency between tenants and landlords.

Rentify enables tenants to manage rental installments through a secure platform.

The company reports that over $408 million worth of property rentals have already been registered on the platform.

The seed funding will be used to further scale operations, integrate more properties across the Emirates, and introduce new fintech features including credit scoring and embedded finance solutions for tenants.

PayTic raises $4m to expand African operations

Morocco-based fintech startup PayTic has secured $4 million in funding to support its expansion into new African markets.

The round was led by AfricInvest, with participation from Build Ventures, Axian Group, Mistral, Island Capital Partner, and Concrete.

Founded in 2020 by Imad Boumahdi, PayTic focuses on automating operational processes for card issuers and banks, such as reconciliation, chargeback management, and regulatory reporting.

The capital injection will enable PayTic to grow its presence in both North Africa and sub-Saharan Africa.

Haball raises $52m to grow Shariah-compliant supply chain financing

Pakistan-based fintech firm Haball has raised $52 million to scale its Shariah-compliant supply chain finance and payment solutions.

The round includes $5 million in equity and $47 million in strategic financing.

Zayn VC and Meezan Bank led the investment, with the capital earmarked for growth in Pakistan and expansion into the Middle East, starting with Saudi Arabia later this year.

Founded to address the credit gap in Pakistan’s SME ecosystem, Haball enables businesses to access Islamic finance products for inventory and procurement needs.

“Supply chain finance in Pakistan is nascent but is expected to be worth over $9 billion; driven by the severe financing gap faced by the country’s SMEs — less than 5 percent can access financing from commercial banks,” the company said in a statement.

The funding will allow Haball to introduce new services tailored to Islamic finance users, integrate further with enterprise resource planning systems, and partner with banks to onboard new business clients.