Economics
Syria will be hurt further by Trump’s 41% tariff rate — the highest on earth
U.S. President Donald Trump meets with Syrian President Ahmed al-Sharaa in Riyadh, Saudi Arabia, in this handout released on May 14, 2025.
Saudi Press Agency | Via Reuters
In May, speaking to a rapt crowd in the Ritz-Carlton Riyadh, U.S. President Donald Trump stunned listeners by announcing he would be ordering the full lifting of U.S. sanctions on Syria, many of which had been in place for decades.
“Now, it’s their time to shine … Good luck Syria,” Trump said.
Less than three months later, the Trump administration hit Syria with the highest tariff rate of any country in the world: 41%.
Syria has very little trade with the U.S. because of long-held sanctions, but some trade between the two does exist. In 2023, Syria exported $11.3 million worth of goods to the U.S., according to the Observatory for Economic Complexity, and imported $1.29 million worth of American goods, technically giving the U.S. a trade deficit with the impoverished Middle Eastern country.
Trump says the levies his administration imposes — which were based on a widely criticized calculation applied to each country in April using trade deficit figures — are meant to address trade imbalances. He has not commented specifically on the case of Syria.
But as it faces the specter of rebuilding its devastated state after 13 years of war under a new government with a very shaky hold on power, the country needs all the help it can get, regional analysts say — not further punishment.
“After years of devastating civil war, the country is in urgent need of 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.
“While the recent lifting of many U.S., U.K., and EU sanctions was a welcome development for Damascus’ economic ambitions, Washington’s imposition of steep tariffs now threatens to restrict any potential for meaningful trade with the United States.”
A collapsed state
Syria had been designated a state sponsor of terrorism by the U.S. government since 1979. U.S. sanctions were imposed on the country in 2004 and again in 2011, after the regime of then-President Bashar Assad launched a brutal crackdown on anti-government uprisings.
In the roughly 14 years since, the country has been devastated by civil war, sectarian violence and brutal terrorist attacks, with the Islamic State taking over parts of the country in 2014 and a subsequent Western-led bombing campaign to eradicate the extremist group.
A drone view shows Damascus city, after fighters of the ruling Syrian body ousted Syria’s Bashar al-Assad, Syria, December 13, 2024.
Yosri Aljamal | Reuters
The toppling of the Assad regime during a shock offensive by anti-Assad militia groups in December 2024 stunned the global community and brought about the prospect of a new beginning for the devastated country. Syria’s new President Ahmed al-Sharaa — a former al-Qaeda member who describes himself as reformed — currently leads the country’s transitional government.
Syria remained under myriad international sanctions, but those imposed by the U.S. were the most severe, as they applied to third parties as well, deterring other countries and groups from transacting with the country.
Most recently, since Trump’s official lifting of sanctions in June, Syria has hosted delegations from several countries including the U.S. and wealthy Gulf states pledging support and investment for reconstruction. At the same time, it’s been beset by outbursts of sectarian violence in different parts of the country and volleys of Israeli bombings.
More than two-thirds of Syria’s electricity grid is non-functional, according to aid organizations, with major cities like Aleppo and Damascus facing blackouts for more than 20 hours a day. In many rural and conflict-ridden areas, there is no power at all.
“This isn’t an economy that is struggling as much as it’s an economy that seems to be almost constantly over the last few months, on the verge of collapse, unless very active steps are taken in order to buttress it and give it a chance to recover,” said H.A. Hellyer, a senior fellow at the Royal United Services Institute in London.
“So any step that deviates from that, I think, is very dangerous.”
Qatar recently announced a project by which its development fund will purchase gas and provide it to Syria — transported via Azerbaijan and Turkey — to support more than 5 million people, with the expectation of improving daily power supply by as much as 40%.
Fahad Al-Sulaiti, the director general of Qatar Fund for Development, described how Damascus will need to lean heavily on aid from Qatar, Saudi Arabia, and the United Nations — particularly now that tariffs will harm the possibility of developing beneficial trade ties with the U.S. He also said Qatar was in close contact with the U.S. government to enable support for Syria.
“We work very closely with our partners in the United States. That’s why from day one … we work very close with the Treasury Department … we’re taking with them to create a good economic system,” Al-Sulaiti told CNBC.
A ‘leash’ on Syria’s new government?
Economic observers note that the 41% tariff itself will have little actual impact on Syria’s devastated economy, since bilateral trade between the two countries is so negligible.
“But the symbolism behind this decision carries far greater weight than the trade figures suggest,” Cafiero said.
“The fact that Syria was singled out for the highest tariffs — even after the easing of most sanctions — sends a clear and calculated message from the Trump administration: Washington is willing to loosen its economic grip on a post-regime change Syria, but only under conditions defined by the White House.”
One interpretation, Cafiero suggested, is that the tariffs could be a way to pressure Damascus into normalizing relations with Israel, which has been attacking and occupying parts of Syria.
“In this sense,” he said, “the economic policy resembles a kind of ‘leash,’ designed to be adjusted in response to the political behavior of the al-Sharaa government and broader developments on the ground.”
Security analysts warn that instability in parts of the country could tip it back into outright war and far greater humanitarian crisis if it does not get the support — economic, humanitarian and diplomatic — that it needs.
U.S. envoy to Syria, Tom Barrack, has expressed his and Washington’s full support for Syria and the Al Sharaa government, and recently announced U.S. and Qatari-backed investment initiatives into the country.
It is not clear whether he supports his administration’s imposition of tariffs on the country; the State Department and White House did not respond to CNBC requests for comment.
Ultimately, the tariffs themselves may have limited immediate economic consequences, but “their psychological and diplomatic impact should not be underestimated,” Cafiero cautioned. “My read is that they reflect Washington’s intent to retain leverage over Syria’s future.”
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