Egypt

The global trading system underwent a fundamental transformation in July 2026, as the United States abandoned limited sector-specific protection in favour of a complex, multi-tiered tariff architecture that turned access to its domestic market into an instrument of economic and political pressure. Four major decisions converged within that single month. The first was the outright repeal of the de minimis exemption, which had allowed small consignments valued below eight hundred dollars to enter the country duty-free. The second was the application of the Section 301 forced-labour tariffs across two distinct bands, imposing 10% and 12.5% according to the compliance record of each partner state. The third was the activation of Section 338, a statutory provision that had lain dormant since the 1940s, to levy 50% duties on a range of Canadian goods. The fourth was the approval of a phased escalation reaching 200% on imports of generic pharmaceuticals.   The consequences of this package extended well beyond the raising of customs duties. They amounted to a comprehensive re-engineering of rules of origin and customs compliance requirements, which in turn altered the cost calculus of every manufacturer and supplier across global supply chains. This new reality pushed firms to search for alternative routes designed not merely to reduce transport costs, but to change the identity of the country of origin itself and so escape punitive duties. That search is precisely what turned the Middle East from a transit corridor into an industrial and logistical node positioned to play a pivotal role on the new map of world trade.   This analysis therefore aims to unpack the effects of the July 2026 package across three connected levels: its domestic cost to the American economy in terms of inflation, compliance friction and the feasibility of reshoring; the realignment of trading partners and the trade diversion and origin leakage that follow from it; and finally its direct implications for the economies of the Middle East and North Africa, together with quantitative estimates of price, investment and shipping trends through the end of the decade.

The events of 2026 have placed global energy markets before an unprecedented test of their resilience. When the effective closure of the Strait of Hormuz in February removed roughly 13 million barrels per day (mb/d) from available supply, Saudi Arabia redirected most of its exports westward to the Red Sea — only to find that outlet itself imperiled when, on 20 July, the Houthis threatened a naval blockade of the Bab al-Mandeb strait aimed squarely at Saudi shipping. For the first time in its modern history, the Kingdom's oil found itself exposed between the two maritime corridors it straddles, and the question “What if navigation through Bab al-Mandeb is severed?” shifted from a theoretical exercise to an operational probability. The answer, however, is not a single figure: it hinges on the scale of the shortfall, the nature of the cargo held back, and the market's capacity to reroute it.   This analysis therefore sets out to quantify the impact of a Bab al-Mandeb closure across three graduated halt scenarios; to unpack the mechanism by which the shock travels from cargo entrapment to a price spike; to trace its non-price consequences for refined products, aviation, and maritime shipping; and to arrive at the fiscal paradox that leaves the gravest harm to Saudi Arabia latent in the intermediate scenario rather than the full halt.

This paper provides a comprehensive assessment of the potential economic, political, and security outcomes should the Arab and Islamic worlds enact a coordinated airspace blockade against Israel. The specified catalyst for this action is the Israeli airstrike on Hamas leadership in Doha, Qatar, on September 9, 2025, an event that has already precipitated a significant realignment of regional diplomatic postures.   The central thesis of this analysis is that a coordinated airspace blockade would represent a strategic shock to Israel, not merely a logistical inconvenience. It would function as a form of asymmetric economic warfare, inflicting severe, multi-sector damage on Israel's globally integrated economy by targeting its core vulnerabilities in aviation, high-value trade, and tourism. The direct economic impact is estimated to be a contraction of 4.8% to 5.7% of Israel's Gross Domestic Product (GDP), a shock sufficient to trigger a deep recession.   Politically, the blockade would fundamentally re-order the regional geopolitical landscape, shattering the post-2020 status quo established by the Abraham Accords and rendering further normalization efforts untenable. It would accelerate a strategic pivot by Gulf Arab states away from a singular reliance on the United States as a security guarantor, fostering a new, region-driven security architecture. For the United States, such a development would present an acute diplomatic crisis, forcing a choice between its ironclad alliance with Israel and its vital strategic partnerships with Arab nations, thereby undermining a cornerstone of its Middle East policy.   From a security perspective, the blockade would act as a "gray zone" challenge, a highly coercive act that exists in the ambiguous space between peace and declared war. It would degrade the operational reach of the Israeli Air Force (IAF) and place the onus of military escalation squarely on Israel. A decision by Israel to forcibly challenge the blockade would create a high-probability pathway to a wider regional military conflict, potentially drawing in the Gulf states, Iran and its proxies, and the United States. The airspace blockade, therefore, represents a plausible and potent instrument of collective action that could irrevocably alter the strategic balance in the Middle East.

The labour market is undergoing a profound transformation as millions worldwide move away from traditional payroll jobs toward flexible, independent work enabled by digital platforms. This shift has accelerated the growth of the gig economy, which is reshaping employment patterns, stimulating entrepreneurship, and driving innovation. At the same time, it raises new challenges related to income volatility, worker protections, and regulatory oversight.   The term “gig,” once used by musicians to describe short-term performances, now refers to a wide range of freelance, contract, or temporary jobs that prioritize flexibility over permanence. Today’s gig economy is powered by digital platforms that link workers with clients, including ride-hailing services, delivery apps, freelance marketplaces, and online teaching platforms. While this model provides economic benefits such as greater productivity, adaptability, and entrepreneurial opportunities, it also exposes workers to risks concerning rights, job security, and fair treatment. Achieving a balance between innovation and equitable protections remains key.   In the Middle East, the gig economy is expanding rapidly, fuelled by a young, digitally skilled population, unemployment pressures, and government-led diversification strategies. By 2024, the region contributed more than 7% of the global gig market, with freelancing, delivery services, and digital platforms becoming central to local economies. Policymakers are responding through freelance visas, skills programmes, and targeted regulations; countries such as Saudi Arabia and the United Arab Emirates (UAE) are aligning gig work with ambitious visions of transformation, while Egypt demonstrates both the sector’s strong growth and the persistent challenges of informality and regulation. While the gig economy has thrived in the Middle East, its full potential can only be realized through a new generation of governmental reforms that go beyond just supporting growth and actively build a stable and protected freelance workforce.

Amid the intensifying confrontation between Iran and Israel throughout 2025, the prospect of a direct strike against Israel’s Dimona nuclear facility has moved from a remote possibility to a plausible escalation scenario. As military operations increasingly target strategic infrastructure on both sides, the regional system faces the risk of a threshold breach—one that could trigger not only military and political consequences but also a multidimensional crisis involving radioactive contamination, mass displacement, and economic collapse across multiple states.   While Israel would undoubtedly bear the immediate brunt—facing mass civilian evacuations, irreversible environmental degradation in the Negev, and the paralysis of its agricultural and tourism sectors—the ripple effects would extend far beyond its borders.   Jordan’s border regions and agricultural zones in the Jordan Valley could face contamination and humanitarian strain, potentially requiring the evacuation of tens of thousands of people. Egypt’s Sinai Peninsula and northern Suez region could suffer fallout exposure, disrupting global shipping through the canal and threatening the Red Sea tourism corridor. Saudi Arabia’s northern provinces, including areas tied to its Vision 2030 megaprojects, could face both environmental and demographic disruption.

The threat of nuclear weapons, once seemingly receding with the end of the Cold War, has resurged with alarming intensity. A renewed nuclear arms race and a dangerous erosion of the norms and treaties that have, for decades, helped prevent the unthinkable are being witnessed by the world. Since February 2022, Russia's invasion of Ukraine and the accompanying rhetoric—including overt and subtly veiled threats to employ nuclear weapons—have broken the post-Cold War taboo. Russia's nuclear weapon posture in Belarus increases tensions even more and normalises the debate about nuclear war. The invasion has had a ripple effect globally, with countries like South Korea, Germany, and Poland expressing renewed interest in nuclear deterrence, either through their own programmes or by hosting US nuclear weapons. Poland's consideration of joining Belgium, Germany, Italy, the Netherlands, and Turkey as a host for US nuclear weapons highlights this dangerous trend. Meanwhile, North Korea's continued, unchecked development of its nuclear arsenal and the persistent nuclear belligerence between India and Pakistan serve as concrete examples of the ongoing global threat.   The nuclear shadow over the Middle East has deepened in the aftermath of the October 7 events, which sharply re-escalated regional tensions and exposed the fragility of the existing security order. As Israel’s military operations in Gaza risk broadening into a wider regional confrontation, concerns about the potential use and further proliferation of nuclear weapons have intensified. The director general of the IAEA has recently warned that the intensification of hostilities in the region could acquire “nuclear dimensions,” underscoring the urgent need for full-scope safeguards and renewed diplomatic engagement to prevent further escalation. In this increasingly volatile context, the nuclear issue remains deeply intertwined with broader political and security dynamics, raising the spectre of a dangerous tipping point in regional proliferation. With the renewed conflict between Israel and Iran, talk of nuclear targets and their impact on the region has returned.   Against this backdrop, this paper examines the various forms of nuclear threats and assesses the vulnerability of selected case study countries. These cases—Egypt, the United Arab Emirates (UAE), Saudi Arabia, and Jordan—were chosen based on their susceptibility to nuclear disasters, primarily determined by the presence of nuclear facilities that could be potential sources of risk. Geopolitical significance was also a key factor in the selection process. The threats are grouped into two main categories: the first relates to the dangers posed by nuclear warfare, while the second focuses on risks associated with nuclear or radioactive leaks. Each scenario is further broken down into sub-scenarios that analyse the projected impacts on the selected cases, including estimated fatalities and casualties. The primary criterion guiding case selection and analysis is human loss, with specific cities chosen based on population density, and consequences evaluated accordingly.   By evaluating projected impacts—including human loss and disruption to critical infrastructure—this paper aims to provide a comprehensive assessment of nuclear vulnerability in these key states. In doing so, it highlights how the evolving nuclear landscape in the Middle East region is shaped not only by technological and strategic factors but also by the interplay of domestic ambitions and external pressures. The findings underscore the urgent need for robust safeguards, regional cooperation, and international engagement to mitigate the growing risks posed by nuclear weapons and technology in an increasingly unstable global environment.

The Gaza Strip, tragically marked by recurring cycles of conflict and destruction, faces a complex and deeply entrenched crisis that extends far beyond the visible damage to its buildings and infrastructure. The repeated devastation has crippled its economy, fractured its social fabric, and left its population in a state of perpetual vulnerability, demanding a comprehensive and transformative approach to recovery. Traditional reconstruction efforts, while necessary, have often fallen short by primarily focusing on the immediate task of rebuilding damaged structures. These efforts, though well-intentioned, have frequently failed to address the fundamental underlying economic and governance challenges that perpetuate instability and hinder long-term progress. This report, therefore, proposes a fundamentally different approach: a three-pillar framework that integrates immediate humanitarian relief with long-term strategies for economic sustainability and the establishment of durable peace. This holistic approach recognizes that true recovery requires not only rebuilding physical infrastructure but also fostering economic opportunity, strengthening governance, and promoting social cohesion, ultimately breaking the cycle of conflict and paving the way for a more stable and prosperous future for the people of Gaza. This three-pillar approach addresses the problem from a broader perspective.

In a significant escalatory move, Israel’s Ambassador to the United Nations, Danny Danon, has notified the UN Secretary-General in writing that UNRWA must cease its operations and vacate its premises by January 30, 2025. This ultimatum follows Israel’s enactment of a law last October banning the agency’s activities within its territory, including occupied East Jerusalem. The decision is rooted in Israel’s allegations that UNRWA has been infiltrated by Hamas, with claims that some of its employees were involved in the Oct. 7, 2023, attacks.   This paper examines the evolving and contentious relationship between Israel and UNRWA. It also explores potential U.S. intentions to dismantle the agency, particularly in light of Donald Trump’s return to power and his recent remarks regarding the displacement of Gaza’s population and the repercussions of this ban.

Lebanese Parliament Speaker Nabih Berri reiterated his call for a general session of Parliament on Jan. 9, 2025, to elect a new president as Lebanon’s presidential vacuum stretches into its third year. This call comes amid an ongoing crisis that began on October 31, 2022, following the end of former President General Michel Aoun's term. Aoun’s departure marked the conclusion of a previous presidential vacuum that lasted for 29 months, during which 45 attempts to reach a quorum for his election were unsuccessful. In the current vacuum, Parliament has failed to elect a president after twelve sessions, the most recent of which was held on June 14, 2024. This series of unsuccessful attempts highlights the profound complexities of Lebanon’s political process.   Recent domestic initiatives aimed at resolving the presidential vacancy and reaching a consensus on a candidate have also faltered. Meanwhile, representatives from five key countries, the United States, France, Saudi Arabia, Egypt, and Qatar, continue their efforts to mediate and navigate the obstacles hindering Lebanon’s political forces from agreeing on a mechanism to address the protracted vacancy crisis.   Amid persistent uncertainty surrounding the identity of Lebanon’s next president, political circles have been actively circulating the names of potential candidates. Among these, Commander of the Lebanese Army General Joseph Aoun, has emerged as a strong contender and is widely viewed as a likely consensus candidate.   The upcoming parliamentary session has ignited significant hopes that it may produce tangible results and lead to the selection of a new occupant for Baabda Palace. However, this optimism is tempered by pressing questions about whether Lebanon’s political forces can overcome their divisions, resolve the presidential vacuum, and converge on a candidate amidst the shifting political dynamics within Lebanon and across the region.

China has mediated a Palestinian reconciliation dialogue in Beijing, and has succeeded in bridging the rift between Saudi Arabia and Iran. These steps indicate a change in China's approach to the Middle East, as it has become an active player in the region by expanding its policies to include political and strategic considerations, in addition to its energy interests. Its "non-interventionist" policy has attracted many countries in the region, which see their growing relations with Beijing as a means of diversification. However, China's increasing involvement may pose a threat to US interests in the region. As Washington has increasingly focused on the Indo-Pacific region, China has emerged as an active player in the Middle East, reshaping regional security dynamics, signing strategic partnerships and memoranda of understanding for its economic activities with most Middle Eastern countries, and strengthening its ties with various regional organizations over the past two decades. Recent Chinese diplomatic initiatives demonstrate Beijing’s deep investment in further developing relations with Middle Eastern countries, with Beijing hosting the Arab-Chinese Summit and the Gulf-China Summit, demonstrating its commitment to strengthening strategic partnerships among the region’s countries and promoting economic development beyond its traditional energy interests. China’s growing engagement in the Middle East is seen as a significant factor shaping the region’s geopolitical landscape and has significant implications for global politics. This raises the question: how China’s methods diverge from those of the United States (U.S.) in the region?

In a move with significant political and economic implications, Egyptian President Abdel Fattah El-Sisi embarked on an official visit to Ankara Sept. 4, 2024. This highly anticipated visit comes months after Turkish President Recep Tayyip Erdogan's visit to Egypt earlier this year and his invitation to President El-Sisi to Ankara. The current visit, considered a turning point in Egyptian-Turkish relations, aims to strengthen bilateral cooperation and open new avenues for coordination on regional and international issues. After a decade of tension and estrangement in the relations between Egypt and Turkey.   The Egyptian President's visit to Turkey is of special importance, as it is the culmination of a long phase of discussions aimed at restoring relations between Egypt and Turkey to their normal course. The rounds of talks and meetings concluded with Erdogan's visit to Cairo last February, which witnessed the announcement of the revival of the High-Level Strategic Cooperation Council for relations between the two countries in its new form, where both leaders co-chair the first meeting of the Council. The meeting also involved a comprehensive review of the Egyptian-Turkish bilateral relations and discussions on potential steps to further enhance the Egyptian-Turkish cooperation.   This analysis highlights the motivations of this visit and its implications on regional and Turkish politics.

The term “unification of arenas” emerged in the discourse of the Arab-Israeli conflict following the 2021 Sword of Jerusalem Battle. This military and ideological strategy is primarily linked to Iran’s regional proxies within the “axis of resistance.” This coalition includes Hezbollah, Hamas, the Houthis, and various Iranian-backed militias in Syria and Iraq. Its objective is to enhance operational coordination among these groups to counter Israel and diminish American influence in the region, aligning with Iranian strategic interests. The approach involves launching simultaneous actions across different fronts, including Lebanon, Gaza, and Yemen, to orchestrate a unified battle against common adversaries, particularly Israel and the United States (U.S.).   While this strategy had been employed on a limited scale prior to October 7, it achieved unprecedented levels of coordination following these operations. The execution involved dividing targets within Israel, with coordinated attacks from Gaza, Lebanon, Iraq, Syria, and Yemen. This meticulous synchronisation and sequence of missile and drone strikes overwhelmed Israeli air defences, with some attacks originating from Yemen and reaching targets in Tel Aviv.   These agents, particularly the Houthis, did not limit their actions to threatening Israeli facilities. Their strikes extended to disrupting navigation in the Bab El Mandab Strait off the Yemeni coast. The Houthis conducted numerous attacks on ships they claimed had ties to Israel, whether through state ownership, ownership by individuals with Israeli citizenship, or simply passing through Israeli ports. This broad targeting strategy encompassed a significant portion of the traffic in this crucial strait for global trade, particularly affecting Arab oil-exporting countries and Egypt, which relies heavily on the Suez Canal for its maritime traffic. As a result, shipping routes have shifted from the Suez Canal to the Cape of Good Hope, prompting long-term strategic transformations and immediate economic repercussions for the Arab countries involved. This analysis aims to assess the Bab El Mandab Strait's importance for Arab countries and explore the strategic implications of its disruption on their economies.