Trump and MENA: tariffs, dollar pegs, oil, and geopolitics

The Middle East and North Africa, for the most part, will be little affected by any direct effects of US President-elect Donald Trump’s proposals to raise tariffs. But, for those with dollar pegs, there are now likely to be fewer interest rate cuts than previously thought. A strong dollar environment will also harm diversification effects in the Gulf and reinforce the need for some countries, such as Egypt, to stick with IMF programmes. Meanwhile, Trump’s energy policy is likely to pave the way for OPEC+ to raise oil output more aggressively. On the geopolitical front, any efforts to ramp up pressure on Iran is unlikely to receive the support of the Gulf countries like it did during his first term.