Bahrain and Qatar Sign Big US Deals: Implications for Trade and Tariff Policy

Bahrain commits US$17 billion in US investments, including aviation and tech deals, while Qatar reviews its US$243.5 billion package with the US amid White House meetings focused on trade, energy, and defense.

President Donald Trump’s administration has maintained a baseline 10 percent tariff on imports from most countries, including Bahrain and Qatar. The tariff policy, which aims to increase American manufacturing and reduce trade deficits, has added friction to commercial ties with Gulf nations that are also major investors in US industries.

Against this backdrop of US tariffs on GCC, the White House on July 16, 2025, hosted two Gulf leaders, Bahrain’s Crown Prince and Qatari Prime Minister. Let us look into the major takeaways that visit has brought for GCC and US market.

Bahrain’s US$17 billion commitment to US industry

Bahrain’s Crown Prince Salman’s visit was accompanied by the formal announcement of Bahrain’s plan to invest over US$17 billion in the US. A large portion of the package centers on a US$7 billion deal between Bahrain’s national carrier, Gulf Air, and US companies Boeing and General Electric.

The agreement includes the purchase of 12 Boeing aircraft, with an option for six more, and the supply of 40 GE engines, a deal expected to directly support US aerospace manufacturing.

Beyond aviation, the agreements also bring in Bahrain’s partnerships with Oracle and Cisco in information technology (IT), as well as planned projects involving artificial intelligence (AI) chips, liquefied natural gas (LNG) production, and aluminum manufacturing.

Trade data reflects stable US-Bahrain commercial ties

While the new investments mark a high point in bilateral cooperation, existing trade flows between Bahrain and the US have remained stable, but not expansive.

In the first five months of 2025, US exports to Bahrain totaled US$631 million, while imports stood at US$550.9 million, resulting in a trade surplus of US$80.1 million for the US. This presents a favorable relationship from the US perspective which is focused on filling the trade gap with tariffs and negotiations with other countries.

In the previous year, American exports reached US$1.65 billion and imports US$1.24 billion, generating a surplus of over US$400 million.

These figures are supported by frameworks already in place. The United States–Bahrain Free Trade Agreement (FTA), active since 2006, eliminated tariffs on industrial and consumer products and opened Bahrain’s services market to US firms in finance, telecom, health, and logistics. The agreement is governed by a Joint Committee co-chaired by the US Trade Representative and Bahrain’s Ministry of Industry and Commerce.

A separate Bilateral Investment Treaty, in effect since 2001, provides the regulation and basis for easy cross-border investment and dispute resolution.

Qatari PM joined US President Trump as past deals revisited

On July 16, 2025 (same day), Qatari Prime Minister joined President Trump. They revisited a US$243.5 billion investment package that was first announced during Trump’s visit to Doha in May 2025.

At the center of Qatar’s commitments is the US$96 billion agreement that involves Qatar Airways acquiring 210 aircraft, a mix of Boeing 787 Dreamliners and 777X models, powered by GE Aerospace engines. This deal is projected to support 154,000 US jobs annually and over one million jobs during the life of the contract. This has placed Qatar well in the US equation of imposing reciprocal tariffs on “high” tariff countries.

In the energy sector, Qatar’s engagement with the US is taking shape through a US$8.5 billion collaboration with McDermott on LNG infrastructure. The partnership includes seven ongoing projects, with McDermott serving as the exclusive supplier of offshore components for QatarEnergy’s LNG expansion. These projects link US energy jobs directly to Gulf-based infrastructure development.

In emerging technologies, Qatar’s Al Rabban Capital has partnered with US firm Quantinuum to launch a US$1 billion joint venture focused on quantum computing. The agreement aims to develop research capabilities while also investing in workforce training and technical education across both countries.

Defense procurement has also played a central role in Qatar’s US investment strategy. The country finalized a US$1 billion deal with Raytheon for its Unmanned Aerial System Integrated Defeat System, making Qatar the first international buyer of the counter-drone system. A separate US$2 billion agreement with General Atomics covers the delivery of MQ-9B remotely piloted aircraft systems.

Trade flows dip despite the scale of investment

Despite the scale of the investment announcements, trade data between the US and Qatar showed a year-on-year decline in 2024. Total goods trade reached US$5.6 billion, with US exports at US$3.8 billion, a decrease of 18.3 percent from 2023. Imports from Qatar have also fallen to US$1.8 billion, down 10.3 percent. The US maintained a US$2 billion goods trade surplus, but that figure marked a 24.5 percent decline from the previous year.

Both Qatar and Bahrain currently face a baseline 10 percent tariff imposed by the US administration. Although these tariffs remain in place, the magnitude and direction of investment from the Gulf suggest that both governments are choosing to deepen ties through large-scale economic partnerships rather than lobbying for tariff exemptions.

Outlook

The back-to-back visits of Bahrain and Qatar leaders to the White House shows a shared economic strategy that is to position their Gulf economies with long-term investments in the US, even as geopolitical uncertainty and trade protectionism loom large.

For US businesses, the inflow of Gulf capital opens up opportunities in aerospace, energy, infrastructure, AI, and defense manufacturing.

As both countries navigate Trump’s reciprocal tariffs, they appear to be playing a balanced game, that could outlast election cycles and geopolitical shifts.

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