Oman's Sultan Qaboos bin Said (R) walks with Iran's President Hassan Rouhani upon Rouhani's arrival in Muscat, March 12, 2014.
Reuters/Sultan Al Hasani

Oman battles Trump on tariffs and Tehran

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The Donald Trump administration is driving a steel and aluminum nail into the coffin of Oman’s economic and foreign policies.

The US president’s tariffs are having an outsize impact on the sultanate’s foray into heavy industry as it seeks to diversify away from oil and gas. Worse, Trump’s hawkish stance on Iran is endangering Muscat’s role as a regional peacemaker as Oman increasingly comes under Washington’s sharp glare.

“President Trump has executed a near-total reversal of American policy toward Iran,” Jonathan Schanzer and Nicole Salter of the right-wing Foundation for Defense of Democracies wrote in a June 10 op-ed for The Wall Street Journal. “Oman is in the unenviable position of having to adjust to this new reality.”

Oman is pushing back, joining fellow Gulf nations BahrainQatar and the United Arab Emirates in lobbying for an exemption from Trump’s so-called Section 232 tariffs. Oman and Bahrain in particular feel burned by Trump’s “America First” policies after negotiating bilateral free trade agreements with the United States as part of President George W. Bush’s ill-fated push to create a Middle East Free Trade Area following the attacks of Sept. 11, 2001.

Muscat hired Washington-based legal giant Akin Gump Strauss Hauer & Feld in April for $120,000 to “provide counsel” and “conduct outreach to US officials” regarding the tariffs through July. The contract marked the first time the sultanate had lobbied Washington in more than a decade.

While the contract with Akin Gump is narrowly focused on tariffs, Oman is also having to push back against increasing criticism that it’s too cozy with Iran. The sultanate has long preferred to engage and trade with Iran instead of joining other Gulf nations in confronting its neighbor across the Strait of Hormuz, serving as a useful mediator for various US administrations.

That past role as a back channel has come back to haunt Oman as the United States grows increasingly hostile toward Tehran. Republicans on the Senate’s Homeland Security panel in particular released a report in June that Bank Muscat played a key role in 2015 — with the Barack Obama administration’s blessing — converting $5.7 billion worth of Iranian-held Omani rials into euros, sparking the Foundation for Defense of Democracies op-ed.

Oman has also come under fire for allowing the Syrian airline Cham Wings, which is sanctioned by the United States for terrorism and arms proliferation, to open a route between Damascus and Muscat. The sultanate has also been accused of allegedly turning a blind eye to Iranian weapons smuggling to Tehran’s Houthi allies in Yemen.

“Iran reportedly has taken advantage of its relationship with Oman to ship weapons across Oman’s borders,” the Congressional Research Service writes in its latest country report to lawmakers and their staff. “In late 2016, US officials reportedly expressed concern to their Omani counterparts that Iran might be taking advantage of its relationship with Oman, and of Oman’s porous border with Yemen, to smuggle weapons to the Houthi rebels.”

Still, the report points out that even under Trump US officials have refrained from publicly criticizing Oman on the matter, believing it would be counterproductive. And despite the negative attention, Oman has had some recent successes on Capitol Hill.

Pending foreign aid spending legislation in the Senate would boost US military assistance and training to $4 million, up $500,000 over the current year’s levels. Trump’s State Department, by contrast, is only seeking $2.5 million for fiscal year 2019, down from $3.5 million in last year’s request.

And as the civil war in Yemen threatens to spill over into neighboring countries and create a fertile breeding ground for terrorism, the Senate added Oman to a list of countries eligible for reimbursement for border security funding in its must-pass annual defense bill.

The provision in the National Defense Authorization Act stipulates that the funding is “for purposes of supporting and enhancing efforts of the armed forces of Oman to increase security and sustain increased security along the border of Oman with Yemen.” The bill cleared the Senate in June, but the House version does not include the provision.

Influencers

Omani Embassy

Ambassador: Hunaina Sultan Ahmed Al Mughairy

In post since: 2005

Sultan Qaboos Cultural Center

Funding


  • Government of the Sultanate of Oman

Leadership


  • Amb. Hunaina Sultan Ahmed Al Mughairy
    Chairwoman of the board
  • Kathleen Ridolfo
    Director

Mission


  • Promote mutual respect and understanding through outreach programs, scholarships, lectures, educational resources and cultural partnerships
Lobbying by Oman

Akin Gump Strauss Hauer & Feld
Terminated Nov. 6, 2018


Travel


U.S. Assistance


U.S. Arms Sales


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