US slaps 10% tariffs on Oman

Observer

03-04-2025

MUSCAT: US President Donald Trump's surprise announcement of sweeping new tariffs — unveiled during what he dubbed 'Liberalisation Day' — has rattled global markets and introduced a fresh wave of uncertainty in international trade. Among the most exposed are smaller economies such as Oman, which may face disproportionate fallout despite their limited role in the US trade imbalance.
The measures include a 25-per cent tariff on all foreign-made vehicles, effective immediately, alongside a 10-per cent baseline tariff on all imports starting on April 5, and country-specific reciprocal tariffs of up to 49 per cent effective on April 9. Canada and Mexico appear to be exempt under the US-Mexico-Canada Agreement (USMCA), though earlier tariffs on selected goods remain. For China, cumulative duties will now reach 54 per cent, combining the new 34 per cent levy with the existing 2 per cent tariffs.
These aggressive steps are being framed by Trump as necessary to address America's long-standing trade deficits. However, the rationale and underlying data — particularly concerning smaller and Gulf economies — have drawn scrutiny.
An Omani expert in trade and economic policy questioned the consistency of the figures presented. 'Take China, for example. The US had a trade deficit of $295.4 billion with China in 2024. Dividing that by the $438.9 billion in imports gives you the 67 per cent cited by the Trump team. That math works,' she explained. 'But for several other countries, especially in the GCC, the figures appear inconsistent or arbitrary.'
Oman typically runs a trade surplus with the US — meaning the US exports more to Oman than it imports. Additionally, Oman maintains a 5-per cent universal import tariff for most countries (excluding GCC partners), but the US is exempt due to the Oman–US Free Trade Agreement (FTA), in force since 2009. This means no tariffs apply, and the only cost on US goods is Oman's 5 per cent value-added tax (VAT). 'I don't see how Oman ends up facing a 10-per cent tariff under this logic,' the expert added. 'Yet it appears we've been included in the baseline category regardless.'
This misclassification could indicate a lack of data precision or a broader political motive. 'Larger economies like Saudi Arabia may be in a better position to negotiate or challenge the classification. But Oman lacks that level of leverage,' she said.
Economists warn that a full implementation of the tariffs, especially if retaliated by affected nations, could drag down global exports and manufacturing output, triggering a slowdown in global GDP. For oil-exporting nations like Oman, the effects could be compounded.
'A drop in global trade often reduces demand for oil, which could pressure oil prices,' the expert said. 'That would directly impact Oman's fiscal revenues and economic momentum.'
One of the most surprising — and concerning — aspects of the new tariffs is their reach. Some of the world's poorest countries, such as South Sudan, Burundi and the Central African Republic, have been included among those facing duties of up to 49 per cent.