As deadline looms, will Tunisia turn to Asian markets amid Donald Trump's tariff threats?

US President Donald Trump has announced a new round of tariffs targeting several countries, including Tunisia, raising alarm in the North African state over the potential fallout for its fragile export economy.

On 7 July, Trump sent a letter to President Kais Saied accusing Tunisia of "unfair trade practices," including disproportionately high tariffs on US products, sometimes exceeding 50 percent.

The letter warned that any retaliatory measures would be met with equivalent counter-tariffs.

"These tariffs may be modified upward or downward, depending on our relationship," added Trump in his letter to Saied.

The tariff will initially be implemented at a 10 percent rate beginning Tuesday, 8 July, with the aim of creating space for bilateral negotiations. If talks fail, the full 25 percent rate will take effect at the start of August.

The tariff measure is part of a broader "economic liberation" campaign by the Trump administration, aimed at correcting what it considers decades of commercial imbalance.

In April, Washington had signalled a harsher penalty, proposing a 28 percent tariff on Tunisian goods. The phased implementation is seen by some as an opening for dialogue, though the Tunisian government has yet to make any formal public response.

While several countries, such as the United Kingdom, Vietnam, and members of the European Union, have initiated negotiations or secured delays, Tunisia's presidency has so far remained publicly silent. 

Even a high-level meeting at the presidential palace in Carthage following receipt of Trump's letter made no mention of the looming tariffs.

Economic experts warn that the measures could deal a serious blow to key sectors of the Tunisian economy. 

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.

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.

"Tunisia is a major producer and exporter of olive oil, but not a consumer", Khalid Laabidi, an investment expert, warned.

"This would impact the agricultural value chain, from smallholder farmers to exporters."

On 8 July, Marouane Ben Jemaa, president of the Tunisian-American Chamber of Commerce and Industry, confirmed that negotiations were underway between Tunisian and American officials to try to reduce the tariff to 10 percent. 

"We already have a solid case and negotiations have started. We will continue the dialogue in hopes of reaching a solution," he told local radio Mosaique FM.

Ben Jemaa said Tunisia is a sovereign state that refuses "any infringement" of its independence. "Our country has enough economic diplomacy and strong arguments to defend its position."

Still, some analysts warn that time is running out. With the new tariff set to take full effect in just weeks, Tunisia's prolonged silence may cost it the leverage other countries have used to protect their industries.

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

Ties between Tunis and Washington have deteriorated since Saied's power grab in 2021 over close ties with Iran and Russia and a reported failing attempt to sway Saied to join Trump's Abraham accords with Israel.

The North African country 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.

Rather than seeking retaliatory measures with Trump, 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.