Why Europe Is Now the Best Market for Saudi Businesses
As of April 2025, Saudi companies exporting goods to the United States are facing a new trade environment. Under the policies of President Trump, the U.S. government has applied a baseline 10% tariff on most goods imported from Saudi Arabia. This decision is part of a broader trade policy targeting Gulf Cooperation Council (GCC) countries. While crude oil remains exempt from these new duties, all non-oil sectors are affected.
This development marks a new phase in Saudi Arabia’s international trade. For decades, the United States has been one of Saudi Arabia’s largest trading partners, especially for non-oil goods such as chemicals, fertilizers, metals, and manufactured products. The new 10% tariff increases the costs of selling Saudi products in the U.S. market and affects the competitiveness of Saudi goods compared to local or third-country suppliers.
At the same time, Europe offers Saudi exporters a more favorable trade environment. Saudi goods entering the European Union (EU) are subject to the EU’s Common External Tariff, a system that sets duties depending on the specific product category. Although these tariffs vary, the average duty Saudi exporters face in Europe is generally lower than the new uniform rate imposed by the United States. Moreover, Europe has long been an open and attractive trading partner for Saudi Arabia, providing businesses access to one of the largest and most diverse markets in the world.
In this article, Rodller will explore how the recent changes in U.S. trade policy affect Saudi exporters, why Europe is now an important market for Saudi businesses, and what strategies Saudi companies should adopt to strengthen their presence in Europe.
Rising U.S. Tariffs and Their Impact on Saudi Exporters
The United States’ decision to impose a 10% tariff on most goods imported from Saudi Arabia is reshaping the trade environment between the two countries. While crude oil, the backbone of Saudi exports, remains exempt, other industries are now directly impacted. Saudi producers of petrochemicals, fertilizers, aluminum, steel, plastics, textiles, and other non-oil goods now face higher costs when selling to American buyers.
This new tariff makes Saudi goods more expensive in the U.S. market. For buyers, the 10% increase can reduce the attractiveness of Saudi products and push them to seek alternative suppliers. For Saudi exporters, the tariff reduces profit margins and places additional pressure on pricing strategies. To remain competitive, companies may need to absorb part of the tariff cost or invest more heavily in marketing and sales efforts, further stretching resources.
In addition, the uniform nature of the tariff eliminates flexibility. Previously, Saudi exporters could adjust product categories or modify product mixes to respond to changing U.S. tariff structures. Under the current policy, most goods face the same rate, reducing the room for adaptation.
A Closer Look at Europe’s Tariff System
In contrast to the U.S., the European Union applies a structured tariff system known as the Common External Tariff (CET). This system sets duties according to product categories, meaning that the tariff rate depends on the specific nature and classification of the goods being imported.
While some Saudi products entering Europe do face tariffs, the rates vary considerably and, in many cases, are lower than the new 10% U.S. tariff. This variation gives Saudi exporters the possibility to work within a system that offers more detailed treatment by sector and product type.
For Saudi companies, the European market presents an opportunity to reduce the impact of high U.S. tariffs and access a consumer and industrial base of over 440 million people. Europe is one of the world’s largest and most integrated economic areas, with strong demand for a wide range of products, from raw materials and industrial goods to specialized chemicals and manufactured items.
It is also worth noting that although Saudi Arabia has implemented anti-dumping duties on certain European imports, with rates ranging from 6% to as high as 124%, these are import measures into Saudi Arabia, not on Saudi goods exported to Europe. This distinction is important because it means Saudi businesses can continue exporting to Europe without being affected by these protective measures.
Europe’s Appeal for Saudi Businesses
Given the current trade climate, Europe stands out as an attractive market for Saudi companies seeking to expand international sales. Several key factors contribute to this opportunity.
1. A Large and Diverse Market
The European Union is made up of 27 member states, each contributing to one of the world’s largest unified markets. Collectively, the EU offers access to hundreds of millions of consumers and a well-developed industrial sector. The demand for raw materials, semi-finished goods, energy products, and manufactured goods remains strong across Europe.
Saudi companies looking to expand can find a wide range of potential customers, partners, and buyers across various industries and sectors. Europe’s industrial base, combined with its consumer market, creates many avenues for Saudi exporters to explore.
2. A Predictable Tariff Structure
While the EU’s tariff system can be complex, it offers predictability because duties are set by product type. Unlike the new U.S. blanket tariff, European tariffs allow exporters to plan shipments and costs more effectively. Businesses can work with customs agents and trade advisors to understand the specific duties applied to their products and adjust pricing and logistics accordingly.
This ability to plan provides Saudi exporters with a level of certainty that can support long-term business development and sustained trade relationships.
3. Alignment with Saudi Arabia’s Economic Goals
Saudi Arabia’s Vision 2030 aims to reduce the country’s dependence on oil revenues by promoting the growth of non-oil sectors, expanding international trade, and encouraging industrial diversification. Europe provides an environment that matches these ambitions.
European demand for energy products, industrial materials, chemicals, fertilizers, and advanced manufacturing inputs creates opportunities for Saudi companies to grow export revenues in sectors prioritized under Vision 2030. In addition, Europe’s focus on sustainability and green industries aligns with Saudi Arabia’s own initiatives to promote renewable energy and environmentally responsible production.
Preparing for the European Market
Although Europe offers many opportunities, success in the European market requires careful preparation and strategic planning. Saudi businesses must understand the regulatory requirements, product standards, and customer expectations that shape European trade.
1. Understanding Tariff Classifications
The EU’s Common External Tariff system uses detailed product codes to determine tariff rates. Saudi exporters need to work closely with customs specialists to ensure that products are properly classified. Incorrect or incomplete classifications can result in delays, fines, or unexpected costs.
Detailed knowledge of tariff codes can also help businesses identify areas where duties are low or where exemptions may apply, enabling them to design export strategies that improve competitiveness.
2. Complying with European Regulations
European markets apply strict product standards, especially in areas related to health, safety, and environmental performance. Saudi exporters must ensure that their goods meet the necessary regulations, including certifications such as CE marking, REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals) compliance, and other product-specific requirements.
Meeting these standards may require adjustments to production processes, packaging, labelling, or documentation, but doing so is essential for entering and maintaining a presence in the EU.
3. Building Distribution and Sales Networks
Establishing reliable distribution and sales networks in Europe is critical for long-term success. Saudi companies can work with local distributors, agents, or trade partners to enter European markets effectively. These relationships help businesses understand market conditions, customer preferences, and logistical requirements, improving the chances of sustained success.
4. Investing in Quality and Innovation
European customers value quality, innovation, and reliability. Saudi exporters must invest in maintaining high product standards, developing new offerings, and responding to emerging market trends. By providing products that meet or exceed European expectations, Saudi businesses can build reputations as reliable suppliers and strengthen their competitive positions.
Strategic Actions for Saudi Exporters
In the current global trade environment, Saudi exporters should take specific steps to maximize the opportunities available in Europe:
- Conduct a detailed review of export products to determine which items are best positioned for the European market in terms of tariff rates, demand, and compliance requirements.
- Engage with trade advisors, customs specialists, and industry experts to fully understand the regulatory landscape and ensure products meet all necessary standards.
- Establish local partnerships or representation to improve market access and support marketing, sales, and distribution activities.
- Monitor trade policy developments within the EU and maintain flexibility to adjust to future changes in tariffs, regulations, or market conditions.
- Invest in ongoing product development to ensure offerings align with European industry trends, such as sustainability, digitalization, and circular economy principles.
By following these steps, Saudi companies can strengthen their international operations, diversify revenue sources, and contribute to the long-term goals of national economic development.
Final Thoughts…
The introduction of a 10% U.S. tariff on most Saudi goods in April 2025 presents real challenges for Saudi exporters. However, it also highlights the importance of building stronger trade relationships beyond the United States. Europe offers Saudi businesses an important opportunity to grow, supported by a large market, a structured tariff system, and a demand profile that aligns with Saudi Arabia’s industrial and economic strengths.
At Rodller, we believe that by focusing on Europe, Saudi exporters can reduce the effects of rising U.S. trade barriers, expand their reach into one of the world’s most important economic regions, and support the transformation goals set out in Vision 2030. Careful preparation, regulatory compliance, and sustained market development will be essential to succeed in this effort.
With thoughtful planning and execution, Saudi businesses can strengthen their positions in Europe, create new growth channels, and ensure long-term success on the global stage.
About Rodller
Rodller (www.rodller.com) provides Digital Marketing, Fundraising and Application Development Services. With offices in Singapore and France we serve both Startups and Fortune 2000 firms. We use a next-generation Portal to combine the use cases of Digital Marketing, Fundraising and Application Development in tangible processes.
Leave a reply