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Lebanon in the Crossfire of Trump’s Trade War
04.29.2025
Even before Donald Trump started his trade war, Lebanon was already facing a bleak economic future.
With Donald Trump back in the White House, economic nationalism has returned—not as a slogan, but as a governing doctrine. The revival of protectionist trade policies and open disdain for multilateralism are not just rattling markets; they are shaking the very scaffolding of the postwar global order.
While headlines fixate on the major players—China, the European Union, sprawling global supply chains—the reverberations are hitting smaller, crisis-ridden states like Lebanon the hardest. In today’s fractured world, being ignored can be just as dangerous as being targeted. Lebanon, already reeling from economic collapse, conflict, and political dysfunction, now faces a stark reality: the world is turning inward, and the safety net it once relied on is disappearing.
Trump’s trade war is not merely about tariffs. It is about unraveling decades of economic interdependence. Multilateralism, foreign aid, and cooperative diplomacy are giving way to a self-interested, transactional ethos. In this emerging order, fragile nations like Lebanon are left with fewer allies—and even fewer options.
Lebanon has been brought to its knees by currency devaluation, institutional paralysis, and war’s long shadow. Now, it is urgently seeking aid—from Gulf states, Europe, and the IMF. But Trump’s America is unlikely to answer that call. The U.S. is no longer a guarantor of stability but an actor driven by the question: “What’s in it for us?”
The trade war is already distorting oil markets, disrupting investment flows, and accelerating inflation. For a country like Lebanon, which imports nearly all it consumes, these global shocks mean more than economic pain—they threaten survival. Currency fluctuations and logistical disruptions will drive prices higher, exacerbating poverty in a country that lacks a functioning subsidy system to fall back on.
Western aid, once tied to human needs, is increasingly conditional—channeled toward allies and ideological partners. Lebanon, lacking both influence and alignment, may find itself slipping off the radar entirely.
At the same time, global investors are retreating from risk. Trump’s erratic policies have triggered a defensive crouch in capital markets, and Lebanon—with its unresolved banking crisis and murky regulatory landscape—looks less like an opportunity and more like a liability.
Unlike Gulf states, which still have reserves and leverage, Lebanon is running on fumes. It enters this new global era in a posture of extreme vulnerability. Without a clear reform agenda and an external strategy rooted in pragmatism, Lebanon risks becoming a geopolitical orphan: bypassed by donors, abandoned by investors, and written out of future reconstruction efforts.
Rebuilding Lebanon is not merely a technical or financial endeavor—it is a diplomatic one. The legacy frameworks of donor conferences and global goodwill are fast becoming obsolete. If Lebanon continues to wait on promises and sentiment, it will be left behind.
We must reposition our recovery not as an emotional appeal but as a strategic imperative for the region. Lebanon’s stability is no longer a local concern—it is a linchpin in a fragile neighborhood. Our message must shift from pleading to proposing. And that begins with brutal honesty: about our dysfunction, about the depth of reform required, and about the failures of a political class too reliant on nostalgia and symbolic gestures.
The era when suffering alone could draw support is over. Aid now flows to those who demonstrate self-help. Lebanon’s chronic refusal to implement reforms or hold corrupt officials accountable has tested even its closest allies. In a world where attention is scarce, and crises are plenty, no country can count on indefinite sympathy.
What Lebanon needs now is not a public relations campaign but a policy overhaul. Transparency, judicial independence, and fiscal accountability are not foreign impositions—they are the minimum requirements of sovereignty. Without them, Lebanon cannot present itself as a nation worth investing in or saving.
Trump’s trade war may not mention Lebanon, but its aftershocks are already visible. This is not theoretical. Lebanon is more vulnerable than ever: economically fragile, diplomatically isolated, and politically gridlocked. The institutions once turned to for help—the IMF, the UN, and Gulf donors—are themselves shifting under the weight of strategic exhaustion.
Solidarity is no longer guaranteed. Assistance is no longer unconditional.
This is Lebanon’s moment of reckoning—not only to repair its economy but to reintroduce itself to a more skeptical, transactional, and impatient world. The country must pivot from crisis management to a credible, reform-driven partnership. That will take more than presentations and promises. It will take political courage, institutional renewal, and the kind of cooperation that has long eluded us.
This is not merely a time to rebuild; it is a time to rebuild. It is a time to transform—or risk irrelevance. The world is moving. If Lebanon wants to remain part of it, it must do more than survive. It must evolve.
Mohammad Ibrahim Fheili is currently serving as an Executive in Residence with Suliman S. Olayan School of Business (OSB) at the American University of Beirut (AUB), a Risk Strategist, and Capacity Building Expert with focus on the financial sector. He has served in a number of financial institutions in the Levant region. He served as an advisor to the Union of Arab Banks, and the World Union of Arab Bankers on risk and capacity building. Mohammad taught economics, banking and risk management at Louisiana State University (LSU) - Baton Rouge, and the Lebanese American University (LAU) - Beirut. Mohammad received his university education at Louisiana State University, main campus in Baton Rouge, Louisiana.