The United States has removed Syria from its list of state sponsors of terrorism, a decision that paves the way for American investment in a nation whose economy has suffered greatly from prolonged conflict.
President Trump announced the decision on July 8, following a meeting with Ahmad al‑Sharaa on the margins of the NATO summit in Turkey.
The United States established the terrorism‑sponsor list in 1979 under the Export Administration Act, and Syria was the inaugural addition on December 29 of that year.
At the time, the Jimmy Carter administration asserted that the Syrian government backed international terrorist organizations, particularly noting the activities of militant Palestinian groups operating throughout the Middle East.
Although Ahmad al‑Sharaa once participated in jihadist activities, he has, since assuming power in January 2025 after decades of authoritarian rule by the Assad family, sought to portray himself as a unifier for a nation deeply fractured.
“From the moment Ahmad al‑Sharaa entered Damascus, he emphasized peace and reconciliation, aiming to reunify the country,” said Charles Lister, director of the Syria Initiative at the Middle East Institute, in a Frontline documentary released in 2025.
“He spoke of disarmament, demobilization, and reintegration, employing the language typically found in textbooks on political transitions.”
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‘A new chapter’
“This represents yet another historic move by President Trump to offer the Syrian people an opportunity for prosperity,” said Secretary of State Marco Rubio when announcing Syria’s delisting from the terrorism sponsors list.
Rubio noted that he had informed Congress of the decision, which will take effect in 45 days unless legislators intervene.
“Removing sanctions on Syria will unlock international trade and investment, enable the country to rebuild, and usher in a new chapter for its people. A stable, unified Syria at peace with itself and its neighbors will benefit not only the region but the entire world,” he added.
Rubio also emphasized that the decision followed formal assurances from Sharaa that Syria would refrain from supporting any future acts of international terrorism.
Donald Trump and Marco Rubio meet with Ahmad al-Sharaa and Saudi Crown Prince Mohammed bin Salman in Riyadh, 14 May, 2025. AP – Saudi Royal Palace 
After the 2003 Iraq war, the United States and other nations accused Syria of permitting foreign fighters to traverse its border into Iraq. Although Damascus denied backing al‑Qaeda‑linked militants, it was widely believed that the government failed to adequately curb their movement.
The European Council on Foreign Relations stated in 2013 that “Syria turned a blind eye to—and even facilitated—the influx of foreign jihadists crossing into Iraq to oppose U.S. occupation forces.”
These groups included the newly formed Jabhat al‑Nusra, which the European Council described as the most effective opposition fighting force in Syria, noting its strong ties to al‑Qaeda in Iraq.
The leader of that organization was Sharaa.
The outbreak of the civil war allowed numerous terrorist groups to establish themselves in Syria, as state authority collapsed in several regions. These included the Islamic State in Syria (ISIS); Hayat Tahrir al‑Sham (HTS), the direct successor to Jabhat al‑Nusra and aligned with al‑Qaeda; and the Kurdish Syrian Democratic Forces (SDF), which Turkey claims is linked to the Kurdistan Workers’ Party (PKK), a group the United States designates as a foreign terrorist organization.
Sharaa ascended to power as the leader of HTS, which ultimately toppled Bashar al‑Assad. Subsequently, HTS publicly renounced its affiliation with al‑Qaeda, seeking legitimacy as a governing authority both domestically and abroad.
Economic timeline
Since being labeled a state sponsor of terrorism in 1979, Damascus has faced restrictions on U.S. foreign aid and the export of military and dual‑use items. Certain financial transactions have also been barred, along with support from international financial institutions backed by the United States.
Despite these constraints, the Syrian economy experienced modest growth up to the onset of the Iraq war in 2003.
The 1969 constitution, enacted under Salah Jadid—the de facto leader of Ba’athist Syria from 1966 to 1970—mandated that the country operate under a “planned socialist” system.
After Jadid’s removal, Hafez al‑Assad retained the socialist framework while launching extensive development initiatives to broaden industry, agriculture, and infrastructure.
Agriculture accounted for 22‑25 percent of Syria’s GDP during the 1960s and early 1970s, according to World Bank data.
The OPEC oil crises of the 1970s spurred strong economic growth in Syria, augmented by remittances from Syrians employed in oil‑producing Arab states such as Saudi Arabia.
By the 1980s, Syria’s economy had transitioned from a primarily agrarian foundation to one driven by services, industry, and commerce. During the 1980s and 1990s, Syrian oil exports surged, bolstered by investments from European firms such as Shell and Total.
From the 1970s through the 1990s, Syria occupied a middle‑income standing among Arab nations—less affluent than the oil‑rich Gulf monarchies of Saudi Arabia and the United Arab Emirates, yet better off than countries such as Yemen and Sudan.
The cost of reconstruction
Starting in 2000, when Bashar al‑Assad assumed power from his father, the economy expanded at a moderate pace, with the IMF estimating annual real GDP growth of approximately 4‑5 percent prior to the civil war’s outbreak in 2011.
Between 2004 and the onset of the civil war, the United States enacted stricter sanctions via the Syria Accountability Act, tightening restrictions on exports and financial transactions. Nevertheless, Syria retained robust trade relations with its primary partner, the European Union, as well as with Turkey, Iraq, Lebanon, and the Gulf states.
However, the civil war, the rise of the Islamic State caliphate, and the ensuing refugee crisis devastated Syria’s economy, leaving Damascus in urgent need of reconstruction assistance.
The World Bank projects that post‑war reconstruction will exceed $216 billion.
“Now more than ever, it is essential for the international community to mobilize support and partnerships to help Syria rebuild vital infrastructure, revitalize communities, and establish the groundwork for a more resilient future for its population,” said Syrian Minister of Finance Mohammed Yisr Barnieh in October 2025.
Although Sharaa’s Islamist base harbors mixed feelings toward his engagement with the United States—particularly due to U.S. backing of Israel—they acknowledge that Trump’s support is vital for Syria’s stability and the survival of the new administration,” said Aron Lund, a Middle East analyst at the Swedish Defense Research Agency, in an interview with RFI.
He added that mutual trust and ideological alignment remain limited, yet the two sides cooperate effectively and appear to have developed a positive personal rapport.
