Why U.S. Tariffs Demand Urgent Diplomatic Action

In a move that challenges long-standing economic cooperation, the United States has imposed a 20% reciprocal tariff on imports from Jordan, directly impacting key exports—particularly garments. For Jordan, whose textile industry has flourished under the U.S.–Jordan Free Trade Agreement (USJFTA), this development poses both an economic and strategic threat that demands immediate and coordinated government action.

A Vital Sector Under Pressure

The garment industry in Jordan has evolved into a national economic pillar. In 2024 alone, exports from the sector reached JD1.8 billion, up from a mere JD80 million in 2000. The United States represents the primary destination for these goods, accounting for nearly 80% of all Jordanian apparel exports.

Furthermore, the sector supports over 90,000 jobs, including more than 29,000 Jordanian workers. In just the first nine months of 2024, 1,500 new jobs were created—underscoring the industry’s contribution to employment and social stability.

The Economic Rationale Behind the Tariff is Fundamentally Flawed

The stated rationale behind the new U.S. tariffs is to reduce America’s trade deficit, which President Donald Trump has characterized as a transfer of national wealth to foreign nations. However, this economic reasoning has been widely debunked.

As The Economist recently highlighted, America’s trade deficit is not a symptom of foreign exploitation—it’s a reflection of domestic economic behavior. Americans save less than they invest, and this structural gap draws in imports. Crucially, the U.S. has maintained this imbalance while achieving faster economic growth than any other G7 nation over the past 30 years.

The idea that bilateral trade must be balanced with each individual partner is, at best, a misinformed oversimplification. It's akin to expecting Texas to run a balanced trade account with every other U.S. state, or requiring every supplier in a business to also be a customer.

What’s more, the methodology used to calculate the new tariff appears to lack any coherent economic logic. Reports suggest that tariffs were determined using a crude formula: taking the bilateral trade deficit as a percentage of imports and halving it. This approach is as arbitrary as taxing citizens based on the number of vowels in their names.

Harming Allies—and American Consumers

These policies are not only misdirected but also counterproductive. They raise costs for U.S. consumers, reduce product variety, and harm global manufacturing networks. American firms that rely on imported materials will now face inflated production costs, which could reduce competitiveness and stifle innovation.

The economic backlash is already visible. Following the announcement of the tariffs, stock prices of major import-reliant companies like Nike—which manufactures in Vietnam, now facing a 46% tariff—fell significantly. The notion that the U.S. would benefit by retreating from global supply chains, and manufacturing everything domestically—including its own running shoes—is economically untenable.

Time for Jordan to Act

Given the disproportionate effect of these tariffs on Jordan’s garment industry, the government must act without delay. The following steps are critical:

1. Diplomatic Engagement: Proactively engage U.S. trade officials and lawmakers to negotiate tariff relief or exemptions for sectors operating under the USJFTA framework.

2. Trade Agreement Defense: Reassert the binding nature and intent of the USJFTA, which was designed to encourage open, rules-based trade—not punitive economic measures.

3. Domestic Risk Mitigation: Support the garment sector through fiscal measures, trade finance, and incentive packages to absorb the initial shock of the tariff and protect employment.

4. Market Diversification: Accelerate efforts to enter new export markets across Europe, the GCC, and East Asia to reduce dependency on the U.S.

The imposition of a 20% reciprocal tariff on Jordanian exports is both economically unjustified and strategically damaging. It threatens to unravel the progress made over two decades of trade cooperation and puts a vital sector of Jordan’s economy at risk.

This is not just a commercial issue—it is a matter of national interest. Jordan’s leadership must act decisively to defend its economic sovereignty, protect its workforce, and uphold the principles of free trade. The stakes are too high for complacency.