Historic Policy Shift Announced in Saudi Arabia

President Donald Trump has announced the complete removal of all United States sanctions on Syria during his visit to Saudi Arabia on May 13, 2025. Speaking at an investment forum in Riyadh, Trump stated, "I will be ordering the cessation of sanctions against Syria in order to give them a chance at greatness," according to Reuters. The decision marks a major shift in US foreign policy toward Syria, which has been designated as a State Sponsor of Terrorism since 1979 and faced extensive economic restrictions for decades.

The announcement comes five months after Bashar al-Assad's regime was overthrown in December 2024, replaced by a government led by Ahmed al-Sharaa. Trump is scheduled to meet with al-Sharaa in Saudi Arabia, further signaling US support for Syria's new leadership. The sanctions removal could unlock billions in aid and investment for a country devastated by more than a decade of civil war.

Historical Context of Syrian Sanctions

The United States first designated Syria as a State Sponsor of Terrorism in 1979, imposing initial restrictions on arms sales and financial transactions. These measures were expanded in 2004 through the Syria Accountability and Lebanese Sovereignty Restoration Act, which further limited economic interactions with the country.

Following the outbreak of civil war in 2011, the US government intensified sanctions to pressure the Assad regime. According to Wikipedia, these restrictions froze Syrian government assets abroad, banned US investments in Syria, and limited petroleum imports. The sanctions regime reached its peak with the 2020 Caesar Act, which expanded secondary sanctions to third parties doing business with Syria.

The Syrian economy contracted dramatically under these sanctions. Al Jazeera reports that Syria's Foreign Minister Asaad al-Shibani welcomed the US decision, describing it as a "new start" for the country's reconstruction efforts. According to Syrian authorities, the nation has lost over $107 billion in oil and gas earnings alone since 2011 due to sanctions and conflict.

European Union's Earlier Action

The European Union had already begun easing restrictions on Syria earlier this year. On February 24, 2025, the EU suspended sanctions on key economic sectors including energy, transport, and banking, according to Reuters.

The EU action followed a "step-by-step approach" that linked sanctions relief to positive developments in Syria, including the protection of minority rights. Euronews reported that EU foreign policy chief Kaja Kallas emphasized this conditional approach, stating, "If we see the opposite happening, the EU must be ready to reverse. This is our leverage."

The United Kingdom has also adjusted its sanctions policy, removing restrictions on 12 Syrian government entities, including the Ministries of Defense and Interior, though maintaining other limitations.

Economic Impact and Reconstruction Challenges

Syria faces enormous economic challenges after years of conflict and isolation. According to economic assessments, Syria's GDP fell by approximately 84% between 2010 and 2023. Human Rights Watch reports that the country's reconstruction needs are estimated to exceed $250 billion, spanning infrastructure, essential services, and economic recovery.

Before the war, Syria enjoyed a strategic position linking Asia with Europe and had substantial natural resource exports, particularly oil. MEMRI estimates that the cost of reconstruction at no less than $300 billion, an amount equivalent to five times Syria's pre-conflict GDP.

The removal of sanctions could bring immediate relief to daily challenges facing Syrians. According to the Wilson Center, one-third of Syria's electricity stations are completely destroyed and another third require repairs and foreign-made parts, illustrating the critical infrastructure needs.

Regional Reactions and Future Outlook

Trump indicated that his decision came after discussions with Saudi Crown Prince Mohammed bin Salman and Turkish President Recep Tayyip Erdogan. Saudi Arabia and several Gulf states have been advocating for an end to Syria's isolation since the fall of Assad.

Omar Rahman, a fellow at the Middle East Council on Global Affairs, told Al Jazeera, "It takes away a key obstacle in their ability to establish some kind of economic development, economic prosperity. But there are plenty of other obstacles and challenges the country is facing."

Despite the sanctions removal, Syria continues to face significant geopolitical challenges. Israel has carried out multiple airstrikes in Syria since al-Assad's removal, and tensions remain high along Syrian borders. The country must also address internal sectarian divisions and establish inclusive governance to maintain international support.

Global Financial Implications

The lifting of sanctions signals a broader opportunity for Syria to reintegrate into the global financial system. With the removal of banking restrictions, Syria may regain access to SWIFT, the global messaging service connecting financial institutions. This could facilitate international trade and investment crucial for rebuilding the country's infrastructure.

According to CNBC, Syrian Foreign Minister al-Shibani stated that the planned sanctions removal marked a "new start" in Syria's path to reconstruction. Analysts suggest that Turkey, Saudi Arabia, and other regional powers are likely to take leading roles in Syria's economic recovery.

The Brookings Institution argues that removing sanctions quickly is essential for Syria's stability. In a January report, it warned that "without the economic relief that the removal of sanctions makes possible, the prospects for a sustainable, legitimate political transition will become even more uncertain."

Related Reading on Morrow Report

For those interested in how alternative financial systems could play a role in Syria's reconstruction and economic revival, the Morrow Report offers a comprehensive Alternative Financial Systems Index. This resource examines various financial mechanisms that could help countries like Syria rebuild their economies outside traditional banking systems. The index provides valuable insights into decentralized finance, community banking, microfinance, and blockchain-based currencies that might prove essential for Syria's economic redevelopment in the absence of established financial infrastructure.