US International Trade and Investment: Key Shifts in 2025 and What MENA Businesses Should Know for 2026

Executive Summary

The United States entered 2025 with a deliberate, executive-driven push to reshape its involvement in global trade and investment. Tariffs were raised—especially on goods from China—while export controls expanded to cover advanced technology, sanctions programs were redrawn, and the first restrictions on US outbound investment began to bite. For MENA economies, these changes cut both ways. New US trade barriers and compliance expectations introduce friction into established cross-border business models, but they also open doors for regional exporters, reorient supply chains, and elevate MENA's geostrategic importance as a partner and an intermediary. This article condenses the key shifts from 2025 and specifies what MENA executives and investors should watch ahead of 2026.

Introduction

For companies operating across the Middle East and North Africa, the United States remains a central export market, a key source of advanced technology and capital, and a regulator whose reach now extends deeper into global supply chains. The past year saw Washington pivot away from traditional multilateral trade forums toward a more transactional, national-security centric posture. The effect is an operating environment that demands stronger regulatory vigilance and scenario-based planning.

These rules are drafted in Farragut Square and Capitol Hill, but their economic impact is felt wherever goods, services, and capital move across borders. A tariff change in Washington alters price competitiveness for manufacturing hubs in Morocco or Jordan; an export control decision can freeze the delivery of a semiconductor plant in Saudi Arabia; an OFAC policy shift can open or close trade corridors through Dubai. Understanding the intent behind these measures is crucial to assessing their impact on the MENA region's own diversification and investment agendas.

Main Analysis

A More Assertive and Transactional US Trade Posture

This administration entered office with a clearer and more expansive trade plan than its predecessor did in 2017. Its actions are grounded in a mercantilist framework that prizes leverage, US industrial strength, and rapid policy implementation over consensus building. The legislative branch has played a diminished role, as tariffs, investment controls, and sanctions are increasingly imposed through executive authority and emergency powers—often with the expectation that courts will settle the legal boundaries.

For multinational companies, the consequence is a degree of volatility that complicates capital allocation and long-term planning. For MENA businesses, the volatility itself is magnified by the region's close integration with the US-China technology ecosystem and with global energy supply channels, which remain prime targets of US strategic competition.

Tariffs: Higher Rates, Implementation Pauses, and Strategic Uncertainty

The scale of US tariff increases in 2025 exceeded many expectations, especially for Chinese-origin goods. Some rates rose to levels not anticipated by markets earlier in the year. While several increases were later postponed or mitigated with exemptions, the trajectory is unmistakable: Washington is prepared to deploy tariffs as an economic challenge and as a strategic weapon.

For MENA exporters, this is a two-sided reality. On the positive side, higher US tariffs on Chinese industrial goods may improve the relative price competitiveness of MENA products in sectors such as petrochemicals, advanced metals, plastics, and specialty components. On the negative side, many MENA exporters rely themselves on Chinese intermediate inputs or dual-use technology; when those inputs are tariffed, production costs rise. Likewise, regional companies with US distribution subsidiaries must absorb tariff risk or renegotiate pricing formulas with customers.

Export Controls and Technology Access: The Walls Go Higher

Export controls expanded in two directions in 2025:

• Product scope: The controls now cover semiconductors, AI, hypersonics, quantum, and a wider range of software and tooling. That can affect MENA data-center operators, defense enclaves, and smart-manufacturing programs that import the most advanced computing hardware.
• Entity list scope: The new “Affiliates Rule” permits the listing of an entity’s parent and subsidiaries, extending a de facto denial beyond the named company. Although its implementation is currently suspended for one year as part of a bilateral economic agreement with China, it signals the direction of future compliance expectations.

For MENA governments pursuing digital infrastructure and AI sovereignty, these controls complicate the acquisition of US-origin technology. They also reinforce the need to industrialize local R&D and alternative supplier basins across Europe, the Republic of Korea, and China itself. The push to establish a “neutral” technology hub, able to arbitrage between US-led and China-led systems, will accelerate.

Sanctions: Program Realignment and Redrawn Risk Maps

US sanctions policy in 2025 contained both expansion and contraction. The termination of the Syria and West Bank sanctions programs signaled a shift away from those conflicts, though companies must still perform deep diligence to understand what a “termination” means in practice, given decades of legal designation and secondary exposure.

Simultaneously, enforcement priorities remain firmly on Iran, North Korea, Venezuela, and Russia. Iran-related sanctions continue to affect Gulf shipping, trade, and finance, pushing many banks and exporters to increase compliance filtering. In the fourth quarter of 2025, Washington imposed sanctions on two large Russian oil and gas companies—an action with profound consequences for global energy balances and for MENA producers who compete with Russian supply in Asian or European markets.

Outbound Investment Controls and Changing Capital Flows

The United States is now restricting and, in specified sectors, prohibiting US persons from investing in Chinese companies active in advanced semiconductors, AI, and quantum computing. The measures are designed to weaken China’s Military-Civil Fusion strategy, but they have indirect impacts on MENA. For example, Gulf sovereign wealth funds might see themselves as natural substitutes for US investment in China-linked tech ventures—or as intermediaries for US capital that cannot be invested directly.

At the same time, complementary US rules—such as the Inflation Reduction Act’s Foreign Entity of Concern restrictions and the latest National Defense Authorization Act’s provisions on outbound investment and biopharmaceutical sourcing—mean clean-energy supply chains and health-tech projects can attract US tax credits or federal contracts only when they exclude foreign entities of concern. This dynamic complicates MENA-linked renewable-energy and life-science industries that use Chinese components.

Regional Impact

The policy shifts out of Washington are interacting with MENA’s own structural transformation in distinct ways across subregions and sectors.

• Gulf economies: With strong sovereign balance sheets and the world’s largest concentration of infrastructure megaprojects, the Gulf is best able to cushion shocks and exploit new trade routes. Revenues from manufacturing, logistics, and financial services could benefit if global supply chains seek a stable middle-ground between Beijing and Washington. The UAE and Saudi Arabia are actively repositioning as neutral arbiters of technology and trade.
• North African exporters: Morocco, Tunisia, Egypt, and Jordan hold preferential access to US and EU markets. If tariff escalation against China redirects sourcing toward the Atlantic basin, North African aeronautics, automotive, textile, and electrical-component manufacturers could see increased orders. But they must first secure supply chains for inputs that may still cross China-US trade lines.
• Energy and petrochemical producers: Tighter sanctions on Russian oil and gas marginally improve the position of OPEC+ members holding spare capacity. However, US LNG export expansion remains a long-term structural competitor for Gulf gas. Tariffs on Chinese-made renewable components may also push MENA developers to seek European or domestic alternatives, raising short-term project costs.
• Financial centers: Dubai, Abu Dhabi, Doha, and Riyadh could become more attractive as alternative funding grounds when US capital retreats from technologies linked to China. The move toward producing “neutral” capital could deepen the regional asset-management industry and accelerate the transition to dollar-based financial trade with softer compliance overlays.
• Startup ecosystems: MENA startups that rely on US cloud services or GPU clusters may encounter licensing waits or export-control restrictions. This risk encourages investment in sovereign clouds—such as those launched in Saudi Arabia and the UAE—and drives development of open-source AI models and regional data-storage networks.

Strategic Implications

For executives, investors, and policymakers in MENA, the 2025 policy bundle carries several concrete demands:

• Elevate trade compliance to the board level. Tariffs, export controls, and sanctions now shift quarterly. MENA companies must acquire CBP, BIS, and OFAC mapping skills, either in-house or through external counsel, before enforcement becomes public and costly.
• Re-engineer supply chains with tariff scenario planning. The effective tariff rate on key sales lines can reverse overnight. By mapping every import and export against the current US tariff classifications—and by testing the sensitivity of each product category to IEEPA, Section 232, and Section 301 changes—companies can respond faster than competitors.
• Prepare for potential tariff refunds. Should the Supreme Court rule that presidential IEEPA-based tariff authority is unlawful, importers may be entitled to refunds. MENA-linked importers are well advised to file protective entries and keep documentation that could support a refund claim.
• Position the Gulf as a neutral corridor for technology transfer. This is a new strategic asset for the region. By building best-in-class legal and customs infrastructure, GCC countries can capture business that is being pulled out of China but not yet reabsorbed by US-friendly partners.
• Monitor the USMCA’s July 2026 joint review. While USMCA is a North American accord, the way it addresses rules of origin, digital trade, labor, and enforcement will become a template for other US bilateral deals—including any future US-Gulf or US-North Africa frameworks. Policymakers should study it as a manual for negotiation.
• Expect continued enforcement activity. With US staff shortages and agency backlogs already delaying license approvals and clarifications, violations become both easier to commit and harder to mitigate. Strict documentation and proactive conduct remain the best insurance.

Future Outlook (2026–2030)

The next three to five years will likely witness the following:

• Fragmentation of the global trade map into separate spheres. MENA economies can profit by building bridges between the US led and China led ecosystems, especially in semiconductor assembly, renewable energy, and electric-vehicle manufacturing.
• Regional supply-chain consolidations. Expect more nearshore production in North Africa for European and US markets, alongside deeper investment in Gulf ports and rail corridors aimed at central Asia and East Africa.
• Growth of digital sovereignty. Every MENA government will fund sovereign cloud infrastructure, encryption systems, and local AI capability, partly due to export-control pressure and partly to protect national data.
• An expanding menu of financial instruments. More Islamic finance products, green sukuk, and special-purpose vehicles will be designed to balance US outbound-investment restrictions with Chinese inbound investment.
• Tight labor markets. As factories and data centers are built, MENA nations will accelerate workforce development in logistics, customs engineering, and trade-law analysis to secure the regional talent pool.

Key Takeaways

• US trade and investment policy in 2025 became more transactional and national-security oriented, and the pace will not slow in 2026.
• MENA exporters must understand the dual effects of US tariffs: market access opportunities versus input-cost escalation.
• Export controls now affect a wider range of advanced technologies and, through the Entity List affiliates rule, may reach downstream partners.
• Sanctions changes (including Syria’s program termination) create openings, but require fresh due diligence and compliance mapping.
• New outbound investment rules from the US increase the opportunity for Gulf capital to serve as the neutral bridge between Beijing and Washington.
• Future competitiveness of MENA will be determined by the speed with which supply chains, customs frameworks, and technology strategies respond to US policy shifts.

Conclusion

US trade and investment policy has changed structurally—not cyclically. Tariffs, export controls, sanctions, and outbound-investment limits are now tools used flexibly and frequently in pursuit of economic security. For MENA businesses, the situation demands new layers of strategy and acute attention to Washington. Winners will embed trade intelligence into their day-to-day operations, use scenario planning to hedge against sudden changes, and turn policy volatility into a source of regional advantage.

Source: This article is based on “US International Trade and Investment: Key Shifts in 2025 and What Businesses Should Know for 2026” by Morgan Lewis (January 2026), available at: https://www.morganlewis.com/pubs/2026/01/us-international-trade-and-investment-key-shifts-in-2025-and-what-businesses-should-know-for-2026.