Allawi: Saudi Investments Are a Major Driver for Iraq’s Rebuilding

(Photo: Ahmad Fathi)
(Photo: Ahmad Fathi)
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Allawi: Saudi Investments Are a Major Driver for Iraq’s Rebuilding

(Photo: Ahmad Fathi)
(Photo: Ahmad Fathi)

Iraq’s deputy prime minister said that Saudi encouragement and investments in Iraq play a great role in the country’s rebuilding process, especially in the fields of energy, electricity, petrochemicals and agriculture.

Ali Allawi, who is also Iraq’s finance minister and acting oil minister, stressed that oil for Iraq is an irreplaceable source of income as it represents 92% of the country’s exports.

Allawi called for the need to move towards a triple electrical grid between Saudi Arabia, Kuwait and Iraq, for what this could contribute to the development process, stating that his country's budget faces current difficulties with a decline in oil prices, which left the government concerned about the salaries of workers and retirees.

Speaking to Asharq Al-Awsat from Riyadh, Allawi said he met with the Saudi Energy Minister Prince Abdul Aziz bin Salman and Minister of Foreign Affairs Prince Faisal bin Farhan. Allawi also met with Saudi Arabia’s ministers of commerce and finance.

During his meetings, Allawi presented the officials with political and economic developments in Iraq, encouraging Saudi investment in his country.

Iraqi Oil

Allwai confirmed that his country is committed to the OPEC+ deal agreed on by a Saudi-Russian initiative.

“We are among the countries most affected by the decision to reduce the rate of oil production,” Allawi said, pointing out that most countries have safety nets in the form of investment funds and financial possibilities away from oil. But Iraq, according to Allawi, is not protected against low oil prices.

If the oil crisis drags on, Iraq will seek to have neighboring countries look differently at the situation in Iraq, as 92% of the country’s resources come from oil.

According to Allawi, areas of flexibility do not exist for Iraq and that the window of options is very limited.

Investment in Iraq

One of the main goals of the new Iraqi government is to restore economic and commercial balance in the country. Allawi pointed out that Saudi economic role in Iraq is somewhat “shy” knowing that the Saudi economy is the size of about half of that of the Arab world’s.

Compared to Turkey and Iran’s $12 billion investment in Iraq, Saudi Arabian investments stand at $1 billion annually.

“We want to change the balance, and we seek to increase the share of Saudi Arabia inside Iraq in various fields, including electricity, oil, petrochemicals and agriculture,” Allawi said.

He pointed out that the flow of Saudi investments in Iraq, despite the obstacles that face Saudi investors, plays a more important and bigger role in the process of rebuilding Iraq.

Allawi acknowledged that major obstacles are inhibiting Iraq’s growth. These hurdles are present in the legal system, administrative arrangements and stifling bureaucracy. The weak banking sector has also led to security problems.



Japan, South Korea Hit with 25% Tariffs as Trump Ramps up Trade War in Letters to Leaders

After the US set a 25% tariff rate on Japan and South Korea, a Toyota sign is shown at a Toyota dealership in Tustin, California, US, July 7, 2025. (Reuters)
After the US set a 25% tariff rate on Japan and South Korea, a Toyota sign is shown at a Toyota dealership in Tustin, California, US, July 7, 2025. (Reuters)
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Japan, South Korea Hit with 25% Tariffs as Trump Ramps up Trade War in Letters to Leaders

After the US set a 25% tariff rate on Japan and South Korea, a Toyota sign is shown at a Toyota dealership in Tustin, California, US, July 7, 2025. (Reuters)
After the US set a 25% tariff rate on Japan and South Korea, a Toyota sign is shown at a Toyota dealership in Tustin, California, US, July 7, 2025. (Reuters)

US President Donald Trump on Monday began telling trade partners – from powerhouse suppliers like Japan and South Korea to minor players – that sharply higher US tariffs will start August 1, marking a new phase in the trade war he launched earlier this year.

The 14 countries sent letters so far, which included smaller US exporters like Serbia, Thailand and Tunisia, hinted at opportunities for additional negotiations while at the same time warning that any reprisal steps would be met with a like-for-like response.

"If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge," Trump said in letters, released on his Truth Social platform, to Japan and South Korea.

The higher tariffs, levied on US importers of foreign goods, take effect August 1, and notably will not combine with previously announced sector tariffs such as those on automobiles and steel and aluminum.

That means, for instance, that Japanese vehicle tariffs will remain at 25%, rather than the existing 25% auto sector tariff climbing to 50% with the new reciprocal rate as has occurred with some of Trump's tariffs.

The clock has been ticking for countries to conclude deals with the US after Trump unleashed a global trade war in April that has roiled financial markets and sent policymakers scrambling to protect their economies.

Trading partners got another reprieve as Trump signed an executive order on Monday extending the Wednesday deadline for negotiations to August 1.

Trump has kept much of the world guessing on the outcome of months of talks with countries hoping to avoid the hefty tariff hikes he has threatened.

The rate for South Korea is the same as Trump initially announced, while the rate for Japan is 1 point higher than the one announced on April 2. A week later, he capped all of the so-called reciprocal tariffs at 10% until Wednesday. Only two agreements have so far been reached, with Britain and Vietnam.

Wendy Cutler, vice president of the Asia Society Policy Institute, said it was unfortunate Trump was hiking tariffs on imports from two of the closest U.S. allies, but there was still time for a breakthrough in negotiations.

"While the news is disappointing, it does not mean the game is over," Cutler said. Trump said later Monday that the United States would impose 25% tariffs on goods from Tunisia, Malaysia and Kazakhstan; 30% on South Africa, Bosnia and Herzegovina; 32% on Indonesia; 35% on Serbia and Bangladesh; 36% on Cambodia and Thailand and 40% on Laos and Myanmar.

South Korea said it planned to intensify US trade talks and considers Trump's plan for a 25% tariff from August 1 as effectively extending a grace period on implementing reciprocal tariffs.

"We will step up negotiations during the remaining period to reach a mutually beneficial result to quickly resolve the uncertainties from tariffs," the country's Industry Ministry said. There was no response from the Japanese embassy in Washington.

MARKET DROP

US stocks fell in response, the latest market turmoil as Trump's trade moves have repeatedly whipsawed financial markets and sent policymakers scrambling to protect their economies.

US stocks were driven to near bear-market territory by his cascade of tariff announcements through the early spring but quickly rebounded to record highs in the weeks after he put the stiffest levies on hold on April 9.

The S&P 500 closed down about 0.8%, its biggest drop in three weeks. US-listed shares of Japanese automotive companies fell, with Toyota Motor closing down 4.0% and Honda Motor off by 3.9%. The dollar surged against both the Japanese yen and the South Korean won.

"Tariff talk has sucked the wind out of the sails of the market," said Brian Jacobsen, chief economist at Annex Wealth Management. Most of the announced tariff rates have been rounded down, he added, and the letters come across as "take it or leave it" offers.

US Treasury Secretary Scott Bessent said earlier on Monday he expected several trade announcements in the next 48 hours, adding that his inbox was full of countries' last-ditch offers.

TRADING BLOCS

The European Union will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday.

The EU still aims to reach a trade deal by July 9 after European Commission President Ursula von der Leyen and Trump had a "good exchange," a commission spokesperson said.

It was not clear, however, whether there had been a meaningful breakthrough in talks to stave off tariff hikes on the United States' largest trading partner.

The EU has been torn over whether to push for a quick and light trade deal or leverage its economic clout to negotiate a better outcome. It had already given up hopes for a comprehensive trade agreement before the July deadline.

Trump has also said he could impose a 17% tariff on EU food and agriculture exports. The president also threatened leaders of developing nations in the BRICS group, who are meeting in Brazil, with an additional 10% tariff if they adopt "anti-American" policies.

The group includes Brazil, Russia, India and China among others.