The New Agreement on Reciprocal Trade between the U.S. and Jordan
This is a guest post by Bashar Malkawi, Legal Counsel at The Government of Dubai Legal Affairs Department
On July 21, 2026, the U.S and Jordan concluded and signed a new Agreement on Reciprocal Trade. Jordan has now officiated preferential access to the US market. The U.S has pursued these legally binding deals with a host of other countries with the purpose of re-shaping trade terms. The Agreements on Reciprocal Trade are not conventional free trade agreements. They are short, asymmetric instruments that use tariff access, and the threat of renewed tariff pressure, to secure commitments on customs enforcement, technical standards, digital trade, critical minerals, export controls, sanctions cooperation, forced labor, state-owned enterprises and “third country” trade practices.
The Agreement on Reciprocal Trade modified and advances the US-Jordan Free Trade Agreement (FTA) signed in 2001. The 2001 FTA successfully eliminated all standard bilateral duties by 2010. However, the Agreement on Reciprocal Trade was necessary to navigate recent across-the-board U.S. tariffs and modern economic realities not captured 25 years ago, such as digital data flows. The Agreement on Reciprocal Trade deal follows a robust trading period, with total bilateral trade hitting $5.34 billion in 2025. It coincides with heavy commercial ties, including Royal Jordanian Airlines' recent $1.4 billion purchase of Boeing Dreamliners and Jordanian pharmaceutical firm Hikma’s $1 billion U.S. investment plan.
Under the new Agreement on Reciprocal Trade, the U.S. commits to provide the preferential rate of duty in effect under the U.S. – Jordan FTA for goods that qualify as originating under the rules of origin under the U.S. – Jordan FTA, or the most-favored-nation rate of duty in effect, as applicable.[1] Key provisions of the Agreement on Reciprocal Trade include a commitment by the U.S. that it will reduce and cap reciprocal customs duties on Jordanian imports at 10 percent. This provides relief from the stiffer 20 percent reciprocal tariffs imposed by the U.S. in April 2025 reduced to 10% (for all countries) under Section 122 on February 24 and set at 12.5% under the section 301 action on forced labor as of July 24. In return, Jordan will maintain duty-free market access for nearly all U.S. exports, including agricultural products and vehicles. The Agreement on Reciprocal Trade binds Jordan to stricter enforcement of environmental protections, enhanced labor rights, and a prohibition on importing goods produced by forced labor within five years.[2] It should be noted that the tariff levels imposed on Jordan since April 2025 are a flagrant violation of the US-Jordan FTA, which provided that Jordanian exports to the U.S would enter duty-free when they qualified as originating under the FTA rules of origin.
More controversial provisions include article 4.1(2) (third-country enforcement clause) and whether it violates GATT or GATS. The purpose of this article is to eliminate transshipment and duty evasion by third-country entities trying to bypass standard U.S. tariffs. China, which currently commands a 19% share of Jordan’s domestic import market, frequently routes raw materials or semi-finished items through friendly trade partners to exploit lower tariff rates. For critical manufacturing sectors—most notably Jordan’s multi-million-dollar garment and textile industry—Article 4.1(2) requires comprehensive tracking of the production pipeline. The enforcement of Article 4.1(2) forces a shift in corporate compliance for companies operating out of industrial zones like Irbid or Zarqa. These companies must provide the complete upstream supply chain trail or face immediate retroactive tariff hikes up to the previous 20% default rate.
The Agreement on Reciprocal Trade prevents Jordan from implementing taxes on digital services being provided within its borders or customs duties on electronic transmissions, thereby denying Jordan what would be a source of revenue.[3] The Agreement on Reciprocal Trade requires Jordan to ensure unimpeded data flows to the U.S., including by recognizing the “adequacy” of U.S. data protection frameworks in its domestic privacy law.[4]
Like any other trade agreement, there is a trade-off and concessions made to secure access to the U.S. market. To secure this 10% tariff cap, Jordan conceded significant elements of its regulatory autonomy, particularly within the digital economy, technology governance, and domestic supply chain oversight. Through joint, unannounced customs inspections and mandatory data sharing, the U.S. has integrated its economic security priorities directly into Jordan's border enforcement. The Agreement on Reciprocal Trade between the U.S. and Jordan functions heavily as an anti-circumvention tool. The Agreement would make Jordan actively police its own industrial zones to ensure that Chinese and other non-market raw materials are not simply re-routed to exploit the U.S. market. In sum, the Agreement on Reciprocal Trade between the U.S. and Jordan is not "reciprocal" but totally one sided like the many other ARTs forced on other US trading partners. For other countries like Canada and Mexico, the new Agreement on Reciprocal Trade between the U.S. and Jordan would be the template for CUSMA review and what countries would expect from the U.S. entering trade negotiations.
[1] Annex I, art. 3, Agreement between the U.S and Jordan on Reciprocal Trade, available at < https://www.whitehouse.gov/wp-content/uploads/2026/07/Jordan-Annex-I.pdf >.
[2] Arts. 2.9 and 2.10, Agreement between the U.S and Jordan on Reciprocal Trade.
[3] Art. 3.3, Agreement between the U.S and Jordan on Reciprocal Trade.
[4] Art. 3.2, Agreement between the U.S and Jordan on Reciprocal Trade.