Why have Donald Trump’s trade tariffs hit Tunisia hard?

US President Donald Trump‘s ‘liberation’ tariffs are set to impact some of the world’s poorest and most vulnerable countries, particularly Tunisia, a North African nation already grappling with crippling debt.

On 2 April, Trump announced that he would impose higher tariffs on dozens of nations with significant trade surpluses with the US.

“These tariffs seek to address the injustices of global trade, re-shore manufacturing, and drive economic growth for the American people”, Trump argued.

The new plan sets a baseline tariff of 10 percent on all imports, aligning with his campaign promises. However, those deemed the “worst commercial offenders” by the Trump administration will face even steeper penalties.

Tunisia is one of these countries, with a 28 percent tariff set to take effect on 9 April, making it one of the hardest-hit by Washington’s latest trade policy.

Tunisia’s olive oil trade with the US

In 2024, trade between Tunisia and the US totalled approximately $1.65 billion, up from $1.3 billion in 2022. Tunisia’s imports primarily come from Europe, China, Turkey, and Algeria (for energy).

Despite the relatively modest trade volume, the olive oil and broader food export sectors are expected to bear the brunt of the new tariffs, says Hamza Meddeb, a fellow at the US-based Malcolm H. Kerr Carnegie Middle East Centre.

Olive oil, a key industry for Tunisia, has steadily increased its share in the US market over the years.

​In the 2023/2024 marketing year, Tunisia’s olive oil exports reached approximately 220,000 tonnes.  The US was among the primary destinations for Tunisian olive oil, with exports increasing by more than 25 percent between May 2023 and April 2024.

However, the sector is already under strain following the recent arrest of a major business leader in the export industry, which disrupted packaged olive oil exports.

In late October 2024, Abdelaziz Makhloufi, CEO of Tunisia’s leading olive oil exporter, CHO Group, was arrested on suspicion of corruption.

The arrest followed President Kais Saied’s surprise visit to the state-owned Henchir Chaâl plantation, where he condemned corrupt practices, including the undervalued sale of agricultural machinery. 

“These new tariffs are expected to worsen the industry’s struggles, compounding existing challenges”, Meddeb said in an interview with the New Arab.

How will Saied respond?

The new tariffs have been widely criticised in Tunisian media as “harsh,” with many questioning when President Kais Saied would address the issue publicly, as other heads of state have done.

Despite Saied’s often hasty diplomatic approach, Meddeb does not anticipate a significant response from Tunisia. However, he expects the tariffs to further strain relations between Tunisia and the U.S., which have been deteriorating since Saied’s power grab in 2021.

In February, Republican US Senator Joe Wilson called for a reduction in US aid to Tunisia, citing its alleged cooperation with Iran and Russia. He warned President Saied of a fate “similar” to that of former Syrian President Bashar Al-Assad. “We must cut aid & impose sanctions. Trump will fix it,” he wrote on X.

Tensions escalated further following Trump’s remarks about expanding the Abraham Accords, which many saw as provocative.

In March, President Trump thanked mayors Amer Ghalib and Bill Bazzi, for their support during the election. He also announced their appointments as ambassadors to Kuwait and Tunisia, respectively—”two great countries,” in his words.

He then shifted focus to his administration’s efforts to establish lasting peace in the region, building on the Abraham Accords. This led to speculation that the new envoy might push for a normalisation agreement in Tunisia, a step rumoured since the US and Israel launched the Accords in 2020.

Last April, Panorama, an Italian publication, suggested that Trump might offer to help resolve Tunisia’s debt in exchange for normalisation.

Tunisia is already facing a severe economic crisis. Inflation is spiralling, unemployment remains high, and public debt has surpassed 80 percent of GDP.

President Saied has ordered authorities to tap into central bank funds to repay foreign creditors after walking away from negotiations with the IMF for a $1.9 billion bailout in 2023. Talks with the IMF have stalled, as Saied refuses to implement necessary reforms, including removing subsidies on basic goods.

The country’s economic woes are largely self-inflicted, with a government strategy of overspending to ease social conditions, which has kept growth low.

‘A new trade policy needed’

Tunisia’s Business News has blamed Trump’s tariffs on the country’s “protectionist policy from another era, enforced indiscriminately, without geopolitical foresight, and with no anticipation of the consequences.” Tunisia imposes tariffs of up to 55 percent on American products.

In contrast, Morocco benefits from a much lower 10 percent tariff, thanks to its free trade agreement with the US, while Algeria and Libya, which maintain modest trade ties with the US but impose high taxes on American products, face tariffs of 30 percent and 31 percent, respectively.

This disparity threatens to skew regional competitiveness, further harming Tunisia’s already fragile economy.

“The new tariffs will add to Tunisia’s growing sense of isolation and vulnerability on the international stage”, Meddeb explains.

Rather than seeking retaliatory measures—unlikely to succeed—Meddeb believes Tunisia should focus on addressing challenges in its food export sector and diversifying its export destinations.

“There is significant potential to expand into Asian markets, but this would require regulatory and policy reforms to enhance competitiveness,” he said.