New Tariffs, New Rules: What's Next for Oman?

This policy brief analyses the impact of recent United States tariff measures on Oman’s trade, with a focus on key export sectors including plastics, petroleum products, and aluminium. The study evaluates the economic effects of a 10% general tariff and a 25% tariff on steel and aluminium using standard trade theory and sector-level export data. The findings indicate that while US tariffs increase the landed cost of Omani exports and reduce competitiveness in affected sectors, Oman may benefit from trade diversion effects as major exporters such as China and Vietnam face higher tariff barriers. Sector-specific impacts vary, with aluminium exports particularly exposed to demand contraction, while plastics and fertilizers may experience mixed outcomes depending on substitution patterns. The brief highlights the erosion of preferential advantages under the Oman–USA Free Trade Agreement and emphasizes the need for strategic policy responses. These include export market diversification, strengthening GCC trade coordination, investment in value-added production, and targeted trade negotiations. This work contributes to policy discussions on trade resilience and adjustment strategies for small open economies facing increasing global protectionism.