Bahrain faces ‘minimal’ impact from US tariffs

TDT | Manama

Email: mail@newsofbahrain.com

Bahrain’s exports to the United States will face a 10 per cent tariff under new trade measures announced in Washington.

The rate is among the lowest imposed and stands in sharp contrast to the steeper charges now applied to goods from China, the European Union, Japan and India.

The US move is aimed at boosting domestic output and reducing its dependence on imports.

While the changes apply across the board, the effects will not be felt equally. Bahrain’s position, in this case, is less exposed.

The kingdom’s economy is more spread out than that of some of its neighbours.

Export base

Its export base is varied, and it maintains long-running trade ties with partners across Europe, Asia and North America.

Crucially, a free trade agreement with the US remains in force. Signed in 2004 and enforced in 2006, it exempts most products from customs duties. Aluminium, one of Bahrain’s top exports, is unlikely to be heavily affected.

Less than a fifth of Alba’s production heads to the US market, which limits the impact on supply chains.

The new tariffs add cost, but the exposure remains limited.

Domestic demand

At the same time, American industry is struggling to keep up with domestic demand.

US factories are producing well below what the market requires, with the shortfall in some sectors exceeding tenfold. That shortfall leaves importers with few options, regardless of added costs.

Bahrain has not responded with any tariffs of its own. Goods from the US continue to enter the Bahraini market without extra charges.

Investor interest

That approach has helped preserve investor interest, particularly from American firms looking to expand into the Gulf. Development continues on the US Trade Zone in Salman Industrial City. Once operational, it is expected to serve as a base for companies supplying the region.

The site is located near the main seaport, airport and the King Fahd Causeway, putting it in a strong position to support regional trade flows. Trade between Bahrain and the US stood at $2.3 billion in 2024, according to data from the US Census Bureau.

Bahraini exports made up $1.2 billion of that total. Aluminium remains the chief item.