Syria is further damaged by Trump’s 41% tariff rate – the highest tariff rate on the planet

Speaking to the fierce crowd at the Ritz-Carlton, Riyadh in May, US President Donald Trump surprised listeners by announcing he would order a full lifting of US sanctions in Syria.

“Now it’s their time for sparkle… Syria for good luck,” Trump said.

Within three months, the Trump administration struck Syria at the highest tariff rate in every country around the world: 41%.

Syria has little trade with the US due to years of sanctions, but there is a trade between the two. In 2023, Syria exported $11.3 million worth of goods to the United States, importing $1.29 million worth of American products, technically giving the United States a trade deficit with a poor Middle Eastern country, according to the Observatory of Economic Complexity.

Trump says the collections his administration places on is based on widely criticised calculations applied to countries in April using trade deficit figures — aims to address trade imbalances. He has not commented specifically on the Syrian case.

But as it takes a very unstable power and faces the ghosts of rebuilding that devastated state after 13 years of war under the new government, the country needs all the help it can get, local analysts say – not a further punishment.

“After years of devastating civil war, the country urgently needs substantial foreign direct investment to begin the long and difficult process of reconstruction and development,” Giorgio Cafiero, CEO of risk consulting firm Gulf State Analytics, told CNBC.

“Recent US, UK and EU sanctions have been a welcome development for Damascus’ economic ambitions, but Washington’s sudden tariff imposition threatens to limit the potential for meaningful trade with the US.”

Syria has been designated as a state terrorist sponsor by the US government since 1979. US sanctions were again imposed in 2004 in 2011 after the then-President Bashar Assad’s administration began a brutal crackdown on the anti-government uprising.

In the next 14 years, the country has been devastated by civil wars, sectarian violence and brutal terrorist attacks, and in 2014 the Islamic state took over part of the country and won a Western-led bombing campaign to eradicate subsequent extremist groups.

The collapse of the Assad regime during a shocking attack by anti-Assad militia groups in December 2024 surprised the global community and brought the prospect of a new beginning in a devastated country. Syrian new president Ahmed al-Shara is a former member of al-Qaeda who describes himself as being reformed – currently heading the country’s transitional government.

Syria remained under countless international sanctions, but those imposed by the US were the most serious as they also applied to third parties and blocked other countries and groups from dealing with the country.

Recently, since Trump’s official sanctions lifted in June, Syria has hosted delegations from several countries, including the US and wealthy Gulf countries, pledged to support and invest in reconstruction. At the same time, they are plagued by an explosion of sectarian violence in various regions of Israeli bombing countries and in different regions of the volleys.

More than two-thirds of Syria’s power grid are not working, according to the aid organization. Major cities such as Aleppo and Damascus face more than 20 hours a day with power outages. In many rural and conflict-filled regions, there is no power at all.

“This is not an economy that appears to be almost constantly collapsed over the past few months, and it is not an economy that is on the crisis of collapse. Unless we take very aggressive measures and give them the opportunity to recover, we are on the crisis of collapse.”

“So I think the step of deviating from that is extremely dangerous.”

Qatar recently announced a project (transported through Azerbaijan and Turkey) in which the development fund will purchase gas and provide it to Syria, supporting more than 5 million people and hopes to improve daily power sources by up to 40%.

Fahad al-Sarathi, director of the Qatar Development Fund, explained how Damascus needs to tilt heavily towards aid from Qatar, Saudi Arabia and the United Nations. In particular, tariffs detrimentalize the possibility of developing beneficial trade relations with the United States.

“We work very closely with our US partners, which is why from day one… we’ve been working very closely with the Treasury Department…We’re creating a good economic system together with them,” Al-Sulaiti told CNBC.

Economic observers note that bilateral trade between the two countries is so negligible that the 41% tariff itself does not have a real impact on Syria’s destroyed economy.

“However, the symbolism behind this decision has far greater weight than trade numbers suggest,” Caffiero said.

“The fact that Syria was chosen with the highest tariffs, even after easing the highest tariffs, sends a clear and calculated message from the Trump administration. Washington is only trying to loosen its economic grip in the changing Syria of the military, only under conditions defined by the White House.”

One interpretation Caffiello suggests is that tariffs could be a way of pressure Damascus to attack parts of Syria and normalize ties with Israel, which it had occupied.

“In this sense, economic policy is similar to a kind of ‘leash’ designed to be coordinated in response to the political actions of the Alshara government and wider developments on the ground. ”

Security analysts warn that if the instability in some countries does not get the support it needs (economic, humanitarian, diplomatic), it can lean it completely towards war and a much greater humanitarian crisis.

Tom Barrack, a US envoy to Syria, has expressed his full support for Syria and the Al-Shara governments and recently announced a US-Qatar-backed investment initiative within the country.

It is not clear whether he supports the imposition of tariffs on the state of his administration. The State Department and the White House did not respond to CNBC’s request for comment.

Ultimately, tariffs themselves may limit the imminent economic impact, but “their psychological and diplomatic impact should not be underestimated,” Cafiero warned. “My reading is that it reflects Washington’s intention to maintain leverage for Syria’s future.”