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GCC should target tariff-free food deals with Trump

US agriculture could be looking for new export markets

A wheat farmer in Washington state, US, inspects his crop at harvest time. A trade war between China and the US could create new opportunities for the GCC Alamy via Reuters
A wheat farmer in Washington state, US, inspects his crop at harvest time. A trade war between China and the US could create new opportunities for the GCC

President Trump’s arrival in office has ushered in a fresh round of “America First” economic nationalism. 

The new US administration is engaged in brinkmanship over higher tariffs on imports from China, Mexico, Canada and Europe to protect and expand jobs in the US. The outcome is likely to define Trump’s tenure over the coming four years.

American voters overwhelmingly backed these policies in November, echoing a wider worldwide trend towards deglobalisation. Of course, protectionism is not news in itself. As many economists have noted, globalisation and deglobalisation are cyclical processes.

However, under Trump 2.0 the trend towards protectionism is likely to accelerate radically. Contests such as trade wars carry significant risks, but they may also create new opportunities for the GCC.

Imagine a scenario in which the new US administration imposes 40 percent tariffs on Chinese consumer goods imports. This eventuality is not far-fetched.

Since China is the US’s third-biggest export destination for food and agricultural products after Canada and Mexico, Beijing may retaliate by imposing tariffs on US imports.

This would hit the US farming industry hard, as it needs export markets for soy, corn, wheat and cotton. It would also come at a time when China has already significantly decreased food imports from the US.

In parallel, many observers think that the second Trump administration is likely to strengthen the US dollar. A strong dollar will make US grains more expensive, resulting in a supply shock in the Midwest, a Republican stronghold.

The GCC already faces significant food security challenges due to its heavy reliance on imports

The US may need to seek alternative export markets to mitigate the impact, and here the GCC emerges as a promising candidate.

The GCC already faces significant food security challenges due to its heavy reliance on imports from around the world, fuelled by limited arable land and water resources.

A trade war between China and the US, particularly in food and agriculture, could create an opportunity for the GCC to increase imports from the US. 

This, in turn, could support domestic efforts to boost meat and dairy production. For example, Saudi Arabia’s planned livestock city could benefit from such trade dynamics if backed up by secure American animal feed imports.

While the Hafr Al Batin project may seem ambitious, it has the potential to become a practical long term strategy to strengthen the GCC’s agricultural industry.

Agriculture has long been one of the most politically significant sectors globally, shaping geopolitics for centuries. Historically, nations which dominate food production and control food supply have also held considerable global power.

Establishing robust free trade agreements will be essential for the GCC to make the most of its opportunities, particularly in navigating US politics and minimising the impact of customs barriers or tariffs. 

Several agreements are under negotiation but their success will depend on achieving regulatory alignment and resolving security concerns – both politically sensitive and complex challenges.

In a world shaped by deglobalisation, evolving geopolitics, resource scarcity and climate change, food trade is becoming a strategically vital factor in ensuring domestic security. 

Martin Keulertz is a lecturer in environmental management at the University of the West of England, Bristol