- The decision to impose new U.S. tariffs on Jordanian exports presents a significant economic challenge.
- The 20% increase in tariffs on Jordanian exports to the U.S. market will raise product costs, making them less competitive compared to goods from other countries.
- This decision places companies operating in Jordan under considerable pressure, potentially forcing some to downsize or shut down branches.
- Initial estimates indicate that a 20% to 30% decline in exports could result in the loss of 10,000 to 15,000 direct jobs.
Amman – Tamkeen has issued an analytical paper examining the economic and social repercussions of the U.S. administration's decision to impose a new 20% tariff on Jordanian exports to the U.S. market. This decision comes at a critical time for the Jordanian economy, which relies heavily on foreign trade, particularly with the United States, raising concerns about its impact on productive sectors and employment in the Kingdom.
In its paper, titled "The Repercussions of the New U.S. Tariffs on the Economy and Workers in Jordan," Tamkeen stated that the decision to impose new U.S. tariffs on Jordanian exports poses a significant economic challenge to the Kingdom, especially in the garment and textile sector, which accounts for approximately $1.75 billion in exports. According to the paper, a decline in production and exports could lead to the loss of thousands of jobs, with initial estimates suggesting that a 20% to 30% drop in exports may result in the loss of 10,000 to 15,000 direct jobs.
This impact will be particularly severe for women, who make up more than 60% of the workforce in this sector, especially given Jordan’s strong dependence on foreign trade, notably with the U.S.
On Wednesday, April 2, 2025, U.S. President Donald Trump announced the imposition of new, wide-ranging tariffs, calling the move a "declaration of economic liberation for the United States." The measures include a 25% tariff on imported cars and a 20% tariff on all other imports.
The paper highlighted that the 20% increase in tariffs on Jordanian exports to the U.S. market will lead to higher production costs, making Jordanian products less competitive compared to those from other countries. This decision places companies operating in Jordan—particularly foreign-owned ones—under significant pressure, potentially forcing some to reduce operations or shut down branches.
Regarding the long-term implications of this decision, the paper indicated that it will exacerbate unemployment rates in Jordan, especially among non-university-educated youth, who rely heavily on the garment and textile sector for employment. It further explained that the impact extends to women’s economic empowerment programs and the United Nations Sustainable Development Goals (SDGs), particularly Goal 8 (Decent Work and Economic Growth) and Goal 5 (Gender Equality).
In this context, the paper pointed out that the garment and textile sector employs approximately 77,730 workers, of whom 27% are Jordanians and 73% are migrant workers, mainly from South and East Asia. This sector forms the **backbone of Jordan’s exports to the U.S., accounting for about 79% of total exports to the American market.
It is worth noting that most of these products are manufactured by foreign companies operating in Jordan’s free areas, benefiting from investment incentives provided by the government. These companies serve as a key source of employment, hiring thousands of Jordanians and contributing significantly to the national economy.
The paper stated that the imposition of these tariffs on Jordanian exports is a cause for concern and emphasized the need for clarifications from Washington regarding the nature of this decision and its compliance with the Jordan-U.S. Free Trade Agreement (FTA), which was signed in 2000 and came into effect in 2001. This agreement has played a crucial role in enhancing economic cooperation between the two countries. Additionally, a comprehensive study should be conducted to assess the impact of this decision on Jordan’s Economic Modernization Vision, which aims to increase Jordan’s exports to $5 billion by 2033.
In this context, there are concerns about the impact of these tariffs on garment exports, which are a key component of Jordan’s trade with the U.S. The paper stated that unilateral tariff increases constitute a violation of trade agreements unless they are justified by a clear legal basis. Such measures could open the door for affected countries to file formal complaints with the World Trade Organization (WTO), as they are seen as breaches of international trade rules.
Furthermore, such actions could trigger retaliatory measures from trade partners, such as counter-tariffs or economic sanctions. The paper highlighted that trade wars stemming from such decisions are not merely economic disputes but also diplomatic crises that impact political relations. A notable example is the U.S.-China trade war during Donald Trump’s presidency, which caused significant market disruptions worldwide.
The paper also underscored the importance of the Jordan-U.S. Free Trade Agreement, which has been a cornerstone of Jordan’s economic growth, exempting most Jordanian products from tariffs and enhancing their competitiveness. According to statistics, Jordan’s exports to the U.S. in 2024 amounted to $3.4 billion, marking a 15.4% increase compared to 2023. The main export sectors included:
- Garments and textiles: $1.75 billion
- Jewelry and gemstones: $900 million
- Fertilizers: $130 million
- Pharmaceutical products: $90 million
- Machinery and equipment: $80 million
These figures highlight the FTA’s crucial role in supporting Jordan’s economy and diversifying income sources.
In light of these challenges, Tamkeen urged the Jordanian government to take urgent action, including:
- Engaging in direct negotiations with the U.S. to reconsider the tariffs or reach new agreements to mitigate their negative impact.
- Exploring new markets in Europe, Asia, and Africa to compensate for potential losses.
- Providing additional incentives for companies in the garment and textile sector to alleviate the burden of the new tariffs.
- Investing in the development of local industries and enhancing their competitiveness to reduce reliance on external markets.