Will US tariffs spur pan-Arab economic integration? 

As the global economic system undergoes accelerated and tumultuous changes in 2025,the US administration’s imposition of draconian tariffs on Chinese imports during Donald Trump’s second term in office is a stark expression of the strong-arm tactics driving US trade policy under the Trump administration. In a move that transcends mere economic gambit, such tariffs stood at 145%, marking a deliberate escalation in a trade war that not only impacts the parties directly involved, but reverberates throughout the global economy as a whole. China did not stand idly by, retaliating with tariffs of up to 125% on US goods, thus instilling a climate of uncertainty and resetting the balance of trade, costs, and logistics. It bears noting the complex and intertwined repercussions of this tension on an international level. European Central Bank President Christine Lagarde cautioned that these policies may trigger a disinflationary impact across the European Union, with China shifting the focus of its exports from the US market to the European market, thus creating a low-priced commodity influx that may crowd out domestic production and disrupt the continent’s monetary policies[1].

For the Arab world, however, the situation is even more convoluted. The US tariffs are not uniformly applied across the region, but rather demonstrate glaring disparities that further entrench the structural vulnerability of these countries proportional to their dependence to the global economy. While the Gulf Cooperation Council member states are subject to a 10% tariff, a number of other Arab countries are burdened with stifling tariffs: Syria faces 41%, Iraq 30%, Libya 30%, Algeria 30%, Tunisia 25% and Jordan 20%[2]. Such disparity is no mere statistic, but rather an expression of a fractured economic reality that requires Arab decision-makers to seriously examine the situation.

Within the Arab geopolitical sphere, economic integration continues to be an unresolved issue. Despite the region’s considerable human and natural resources and its strategic location, an integrated regional economic model comparable to other experiences such as the European Union has yet to emerge. It is not for lack of attempts, as evidenced by initiatives such as Resolution No. 17 issued by the Council of Arab Economic Unity in 1964, establishing the four freedoms: freedom of movement of people and capital, free exchange of goods, freedom of transport and transit and freedom of residence, work and economic activities. Yet these principles remained largely on paper.
Why has this vision not been actualized? Could it be due to political considerations, a lack of will, or the absence of an institutional framework? How is it that the past decades have not yielded a pan-Arab project capable of weathering global fluctuations and of competing in the international economy?

As international policies tend toward greater isolationism and differentiation, there is a resurgent need to raise this issue today, not as mere speculation, but rather as a strategic imperative to reshape the North-South relationship. History may unfold in moments of crisis, affording rare opportunities such as the chance to establish an Arab economic system that reinstates the notion of mutual dependence and lays the foundations for a long-lasting resilience.

Will the Arab world capitalize on this opportunity? Or will we squander it once again, allowing the issue to remain in limbo, pending adoption not as an individual contemplation, but as a cross-generational project?

In order to provide a response, it may be valuable to step beyond impassioned rhetoric toward more realistic analytical approaches. Neo-functionalism then looms as a framework that, rather than providing definitive answers, affords opportunities to ponder the possibilities of Arab integration. This theory is quite simple and implicitly intricate: integration begins not at political summits, but on common ground, i.e., in factories, ports, markets and production lines that converge without much fanfare[3]. Therein, in these day-to-day economic spheres, intricate relationships are interwoven, propelling the parties — often unconsciously — toward further cooperation and greater overlap. It’s referred to as “functional spillover,” a metaphor for the slow movement that shifts integration from one sector to another, from commodity to policy.

Ernst B. Haas and Philippe C. Schmitter have both spoken about this particular form of accumulation, whereby the state is not the sole actor on the scene, but is joined by other actors such as companies, institutions and individuals who shape the economy as they do politics. The current US protectionist measures may represent more than an imminent threat, they are powerful external pressures that forces the domestic sphere to reorganize, engage in self-reflection and build bridges, rather than rely on slogans. An opportunity, not as a salvation, but as a peaceful and promising start to a project that has long been relegated to indecision. It is a project that will have to start from the ground up, from institutions and simple daily actions that, over time, will accumulate to accomplish what slogans had failed to achieve.

[1]   Sky News Arabia. (2025). “Tariffs could have a disinflationary impact on Europe.”
http://bit.ly/4nlL91a
سكاي نيوز عربية. (2025). “الرسوم الجمركية قد يكون لها تأثير انكماشي على أوروبا.”

[2] https://www.whitehouse.gov/presidential-actions/2025/07/further-modifying-the-reciprocal-tariff-rates/?utm_source=chatgpt.com

[3]   Schmitter, P. C. (1969). Three Neo-Functional Hypotheses about International Integration. International Organization, 23(1), 161–166. http://www.jstor.org/stable/2705772