A series of government meetings has been taking place in recent days to assess the impact of the tariffs that the US abruptly imposed on trade with almost every country in the world. The meetings aim to assess the measures needed to manage the consequences of the new tariffs and navigate the economic uncertainty that is prevailing in their wake.
According to one government source, the meetings examined the short- and medium-term impacts of the tariffs and the subsequent volatility that has swept across global markets.
On 2 April, US President Donald Trump announced sweeping tariffs of between 10 and 50 per cent on countries that export to the US. According to the website of the Centre for Strategic and International Studies, a US non-profit research organisation, Trump’s announcement ushered in “the most sweeping tariff hike since the Smoot-Hawley Tariff Act, the 1930 law best remembered for triggering a global trade war and deepening the Great Depression.”
The ensuing economic turmoil comes at a time when the Egyptian economy is already grappling with the fallout from regional instability, including Israel’s genocidal war on Gaza and attacks by Yemeni Houthis against vessels passing through the Red Sea which have caused a 60 per cent decline in Suez Canal revenues, a leading source of foreign currency for the Egyptian state.
The chaos caused by the tariff blitz and the subsequent exit of hot money from Egypt pushed the dollar exchange rate from around LE50 to LE51.75. While a leading Cairo banker said that the pound could rebound “in a few days, when the stock markets start to recover from the shock,” the government source offered a less hopeful forecast. He argued that if the already tense regional situation took turn for the worse with “any sort of American military or economic move against Iran” there is no telling how far the devaluation could go.
On Monday and Tuesday, the Israeli press reported that, during their second meeting in Washington since Trump’s inauguration in January, Trump asked Israeli Prime Minister Benjamin Netanyahu to give time for diplomacy to work vis-à-vis Iran. Trump spoke of direct talks with Iran on a new nuclear deal that should take place 12 April, with Iranian media reporting that Iran’s Foreign Minister Abbas Aragshi and US Middle East Envoy Steve Witkoff will chair their countries’ respective delegations in Oman.
According to a source informed on preparations for the talks, “it is wrong to get too optimistic about what these talks can produce.” The source added that Trump had agreed to give high-level talks a chance only after being petitioned to do so by several Gulf capitals, including Kuwait and Muscat, and to a lesser extent Riyadh.
The government source highlighted multiple unpredictable factors that are currently impacting regional politics, including Red Sea security and instability in the Horn of Africa — “internally for several countries, including Sudan, and across borders into neighbouring states”. He stressed, however, that for now the top challenge is the Israeli war on Gaza, saying: “It is an exceptionally challenging moment, and though we are trying very hard to envisage an end to the war we are not sure if this will happen or not.”
The source spoke before Trump said, during a White House photo-op with Netanyahu, that he believed that the war on Gaza would end “in the not-too-distant future”.
According to Egyptian and Cairo-based foreign diplomats, the most troubling question is less when the war will end, but how. They argue the war has continued, and become more aggressive, because of the leeway Trump gave Netanyahu, and if its end is presaged on the displacement of Gazans, then this will mark the beginning of a new chapter of regional tensions.
During Monday’s press statements with Netanyahu, Trump refloated his proposal to “control and own Gaza” and possibly turn it into a free trade zone. He described Gaza as “an incredible piece of real estate” and said that he could not understand why Israel ever gave it up.
For Cairo, Trump’s statements were a clear message that Washington is unwilling to engage with the scheme proposed by Egypt, and endorsed by both the Arab League and the Organisation of the Islamic Conference, to re-work Gaza’s political and demographic configurations to allow a fresh start for Palestinians, accommodate Israeli security demands, and turn the Strip into an investment opportunity.
The government source said that Cairo would nonetheless continue to push the scheme. “We are trying very hard, and we are working with the Qataris, talking to Hamas and the Palestinian Authority, trying to get the Americans on board, and engaging the Israelis, but the signals are not clear.”
During the past four weeks, Cairo hosted several meetings between Egyptian officials and Hamas delegations. Egypt has also received several Israeli delegations and this week a senior Fatah delegation was in Cairo for talks on possible scenarios for a Hamas-free political regime “to help convince Israel to stop the war it says is designed to expel Hamas from Gaza.”
In addition, Cairo hosted a three-way summit on Monday between President Abdel-Fattah Al-Sisi, French President Emmanuel Macron and King Abdullah of Jordan. The meeting followed bilateral talks between Al-Sisi and his visiting French counterpart. Statements issued following the meetings were clear — the war on Gaza must stop, Gazans must be spared from the ongoing massacre, and also from displacement.
Following their summit, the three leaders held a telephone conversation with Trump to press upon him the need to take into consideration the regional and international consequences of forcing a new reality upon the Palestinians. A similar message had been relayed to Trump during a telephone conversation with Al-Sisi earlier in the week.
The government source said that Cairo is counting on capitals like Paris, Berlin, and Madrid to push for reason to prevail. He added that Macron’s visit to Arish on Tuesday sent “a significant message” and constituted a show of support to humanitarian organisations waiting on the Egyptian border with Gaza to aid the Strip’s besieged population.
Macron was escorted by Al-Sisi in a very unusual trip by the Egyptian head of state. The two leaders visited Arish Hospital, where they talked with Palestinians receiving medical care.
According to a statement by the French presidency, Macron will call for the “reopening of crossing points for the delivery of humanitarian goods into Gaza” in order to end the closure imposed by Israel since early March.
Since the resumption of its war on 18 March, Israel had killed over 1,300 Palestinians, mostly children and women, and wounded almost 4,000, most with life changing injuries. Israel has also expanded its military footprint, controlling 50 to 70 per cent of Gaza and forcing repeated displacements on Palestinians who are now crammed into less than one-third of the densely populate Strip.
Speaking on Monday, Francesca Albanese, UN special rapporteur on human rights in the Occupied Palestinian Territories, blamed Trump for allowing Israel to push forward with its “brutalisation” of Gaza.
Albanese’s statements came hours after the UN Human Rights Council extended her mandate despite Israel-US lobbying to label her anti-Semitic.
* A version of this article appears in print in the 10 April, 2025 edition of Al-Ahram Weekly
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