Monday 07 / April / 2025
Muscat: Financial experts have stressed that negotiating formulas that preserve countries' trade balances will lead to stability in global markets following the imposition of new tariffs by US President Donald Trump.
As Oman is part of global supply chains it will be affected by US tariffs, said an expert adding that the impact will be relatively limited since US imports of oil, gas, and refined products are exempt from tariffs. However, the impact will be visible through lower oil prices due to reduced global demand and lower global growth rates.
In the coming months, the Sultanate of Oman must intensify marketing of its economy as an attractive investment destination, the financial expert added.
The new US tariff package has cast a shadow on the global economy, including a 34 percent tariff on China, a 20 percent tariff on the European Union and varying rates on a number of countries. However, a minimum tariff of 10 percent has been levied across all the GCC, including Oman on all imports from the US.
Dr. Mohammed bin Hamid Al Wardi, a member of the State Council, an academic and economic analyst, said that the coming period will witness fluctuations and intense trade negotiations, which could impact global economic growth.
He added that global markets will stabilise after major economic powers reach agreement to preserve their trade balance.
He pointed out that the tariffs imposed by the US will disrupt global trade, particularly supply chains, leading to weak global economic growth.
This was confirmed by the World Trade Organisation (WTO), which warned of the risk of a trade war. It also forecasts a contraction of global trade in goods by about one percent in 2025.
He explained that US tariffs will have other repercussions related to fluctuations in the dollar and other currencies, US interest rates, and rising inflation rates, which will add a degree of uncertainty to the global economy and weaken global trade.
He pointed out that the United States aims, through these new tariffs, to improve its negotiating position and maximise gains from upcoming negotiations.
Therefore, it is opening the door to negotiations. Countries will deal with these tariffs differently, with some taking countermeasures, while others will adapt and seek to mitigate their economic impact.
Dr. Yousef bin Hamad Al Balushi, an economic expert, pointed out that the primary goal of the new US tariffs is to reengineer the US economy to attract domestic investment and further support the US manufacturing and export sectors, creating significant opportunities for the US market.
He added that the impact of these new tariffs will be significant on the global economy, as they will lead to a decline in global demand, particularly from major economies such as China and the European Union. This will have repercussions on fuel demand from these countries, leading to a decline in oil prices.
The new US tariffs and countermeasures by some countries will also impact global financial markets, with global stock exchanges suffering losses due to investor panic.
He pointed out that there are opportunities to increase the Sultanate of Oman's attractiveness to foreign investment and to ease its burden on the US market, as imposing these tariffs at a rate of 10 percent is still preferable to the high rates imposed on many countries around the world, such as China and Taiwan.
Louay Bataineh, an economic expert, emphasised that the imposition of new US tariffs is expected to have multiple global economic repercussions, most notably a contraction in the volume of international trade. Increased tariffs are likely to slow the movement of goods, particularly between the United States and its major trading partners such as China and the European Union. This could weaken global supply chains, lead to higher prices, inflationary pressures, and increased import costs, which means higher prices for consumers.
He said that the new US tariffs will lead to a restructuring of supply chains between countries and regions. Companies may seek to reposition their production lines to avoid the tariffs, creating opportunities for some developing countries and weakening the position of others that were dependent on exports to the United States.
He explained that the expected scenarios as a global reaction to US tariffs include other countries taking countermeasures, opening the door to a comprehensive trade war that would harm all parties. Another scenario involves negotiating and restructuring agreements, particularly free trade agreements with the United States, as some countries may resort to negotiating with the US in an effort to reduce tariffs or obtain exemptions.
He further said that among the expected scenarios for countering the impact of tariffs is for countries to support their affected industries, either through stimulus packages or through internal protectionist policies that push many countries to strengthen their regional relations and rely more on trade within blocs, in an attempt to reduce their dependence on the US market.
