Former Iranian Foreign Minister Hossein Amir-Abdollahian and his Saudi counterpart Prince Faisal bin Farhan Al Saud after signing a joint statement in April 2023 on the restoration of diplomatic relations, with Chinese Foreign Minister Qin Gang in the background. Photo by Mehr News Agency. Source: Wikimedia Commons. CC BY 4.0.

Over the past 25 years, the West Asia and North Africa (WANA) region has undergone a significant transformation in its global trade relationships. Once heavily dependent on Western markets, particularly the United States and Europe, many WANA countries have diversified their economic partnerships, with China emerging as a dominant trading partner. 

This shift reflects broader global economic trends and strategic realignments as nations seek to reduce reliance on traditional partners and explore new economic opportunities. With US trade decisions under new President Donald Trump pushing towards a global trade war, and other positions threatening actual violent war and ethnic cleansing, WANA countries are likely to find themselves in the middle of this storm. 

The rise of China

China has significantly increased its trade footprint in the WANA region over the last two decades. In 2022, bilateral trade volume between China and WANA countries reached USD 469 billion, a sharp rise from around USD 17 billion in 2000, at which time the volume with the US was compared to USD 68 billion, according to data from the World Bank’s World Integrated Trade Solutions. This makes China the largest trading partner for several WANA economies, particularly in the energy sector.

Saudi Arabia, for example, has left behind its traditional reliance on US markets, with China becoming its primary oil importer when Saudi oil exports to China exceeded those to the US in 2010, illustrating a shift in trade patterns. The kingdom has taken steps to reduce reliance on the US dollar. In early 2022, Riyadh signaled openness to trading in alternative currencies, a potential indicator of de-dollarization in global oil markets. 

Meanwhile, Iran has also emerged as a key strategic trade partner for China. According to the Iran Open Data Centre, “China's share of Iran's trade surged from less than 2% in 2000 to approximately one-third in 2022.” In contrast, European partners — Germany, France, and Italy — once held a 20 percent share in 1997, but this has now dropped to less than 3 percent. 

The center attributes this shift to “sanctions, geopolitical shifts, and the rise of Asian economic power,” in addition to the fact that China’s rapid economic growth and the Belt and Road Initiative have provided Iran with alternative markets and investment opportunities. However, “Iran’s growing dependence on China carries both economic and geopolitical implications,” according to the center. 

Despite the growing influence of China, the United States remains a significant economic partner in the WANA region. In 2022, US trade volume with WANA countries still amounted to approximately USD 161 billion with the global hegemon maintaining strong commercial relationships with Gulf countries, Egypt, and Israel, often reinforced by military and defense agreements. 

Who is dependent on the US and who is looking elsewhere?

Several countries continue to be dependent on the US. But while the US continues to hold economic influence in the region, certain countries are more dependent than others. 

Trump’s latest threats to withhold billions in annual aid to Egypt and Jordan — unless they support his plan to forcibly displace Palestinians and turn Gaza into a massive real estate project — expose these countries’ strategic dependence on US funds through military aid and economic assistance. 

However, Egypt is actively diversifying its trade portfolio, developing closer economic ties with China in recent years. Beijing has invested in key Egyptian infrastructure projects, including the construction of the Suez Canal Economic Zone. Trade between China and Egypt reached around USD 18 billion in 2022, double its trade volume with the US, according to data from WITS. In the case of Jordan however, its trade volume with both the US and China has remained comparable since 2000, according to the same data. 

While the UAE and Israel maintain deep security ties with the US, with their economies, particularly in defense and technology, being closely linked to Washington, countries such as Saudi Arabia, Iraq, Qatar and Turkey are actively expanding their trade partnerships with China and other Asian markets to reduce reliance on the US. 

Both Iraq and Qatar are moving closer to China, especially in the energy sector, aligning their exports with China’s growing demand. This is evident in Qatar recently signing long-term LNG supply agreements with China, while the latter is the largest buyer of Iraqi oil, amounting to 35 percent of its total exports, making Iraq its third biggest supplier of oil after Russia and Saudi Arabia.  Turkey has also been exploring alternatives to US dollar-based trade, aligning with Russia and China on economic cooperation.

China’s economic ascent vs. US military dominance

The past 25 years have seen a remarkable transformation in WANA trade relations. While the US remains a major economic and strategic partner, especially due to its military presence and weapons sales, China’s rapid economic rise has reshaped trade dynamics across the region. Countries that were once heavily dependent on the US are now diversifying their partnerships, seeking alternative markets and sources of investment.

As Trump’s trade policies continue to evolve, impacting both US allies and adversaries, the balance of power in the WANA region is poised for further shifts. The expanding economic influence of China, coupled with efforts by some WANA countries to de-dollarize and strengthen ties with the global majority, signals a move toward a more multipolar trade environment than at the start of the millennium.

However, this economic realignment faces a significant counterforce in the form of US military dominance including through its key ally, Israel. With Washington and Tel Aviv willing to use military power — unchecked by international law or the UN — the rise of China’s economic footprint in the region may increasingly collide with US strategic interests, pushing the region towards potential increase in violence.