Trump’s Middle East Reset: A New Challenge to China's Belt and Road Footprint

In May 2025, U.S. President Trump announced two bold initiatives during the Saudi-U.S. Investment Forum in Riyadh: lifting over a decade of U.S. sanctions on Syria, and dispatching Secretary of State Marco Rubio to Istanbul to engage in a potential peace dialogue between Russia and Ukraine. The omission of Israel from Trump’s Middle East itinerary raised eyebrows and signaled a strategic recalibration of America’s regional priorities. These developments are emblematic of a broader U.S. policy shift away from ideological frameworks toward hard-nosed transactional diplomacy grounded in American self-interest.

For China, and particularly for Chinese companies engaged in Belt and Road Initiative (BRI) projects across the Middle East, this shift brings a new wave of challenges. As the U.S. re-enters the region through strategic realignment with Saudi Arabia, Turkey, and now a post-conflict Syria, China faces rising geopolitical and regulatory risks in territories once seen as promising nodes of BRI expansion.

Trump's re-engagement with Syria is part of a pragmatic strategy to regain economic and diplomatic influence in the region. The provisional Syrian government under Ahmad al-Sharaa, formerly affiliated with HTS (a disbanded jihadist group), reportedly proposed opening the country’s energy sector to U.S. investment, building a "Trump Tower" in Damascus, and exploring a détente with Israel in exchange for U.S. recognition and economic relief. These proposals, though controversial, align neatly with Trump's America First doctrine: leverage access and infrastructure for strategic returns.

By leveraging new ties with Turkey and Saudi Arabia, the U.S. aims to build an anti-Iran regional axis and diminish the influence of Russia and China. This presents a direct challenge to China's economic footprint in the region. While China has developed robust infrastructure ties in Syria, Iraq, and Iran, those partnerships could now face economic competition or outright exclusion. More significantly, the U.S. may promote “de-risking” policies that quietly encourage regional players to reconsider their heavy reliance on Chinese contractors, technologies, or financing.

Regulatory risks are also on the rise. U.S.-backed reforms in Syria, if realized, will likely include public procurement standards, anti-corruption frameworks, and financial compliance protocols that mirror U.S. and European practices and standards that may disfavor opaque state-backed Chinese firms. Meanwhile, Saudi Arabia and Turkey are increasingly adopting Western-style screening mechanisms around data governance, telecom infrastructure, and national security-related projects. Chinese companies operating in sectors such as telecom, cloud services, port logistics, and surveillance will likely face stricter scrutiny or find themselves excluded from key public-private partnerships.

Moreover, U.S. extraterritorial laws such as the Foreign Corrupt Practices Act (FCPA) and Office of Foreign Assets Control (OFAC) sanctions pose an additional layer of legal risk. Chinese firms conducting operations in sanctioned or gray-zone territories may find themselves inadvertently exposed to U.S. enforcement actions, including asset freezes or international banking restrictions. As the U.S. asserts its role in rebuilding post-war Syria, these legal and financial levers will be used to privilege American and aligned investments.

Chinese enterprises must also prepare for new forms of political risk. As the U.S. reorients its focus to the region, the possibility of asymmetric tensions and proxy conflicts rises. Chinese infrastructure or energy assets in Syria, Lebanon, or Iraq could become collateral damage in future geopolitical flare-ups or fall victim to shifting allegiances. Unlike in the past, neutrality may no longer guarantee safe operational space.

In this increasingly complex environment, Chinese companies should adjust their strategies. First, they must improve local legal and compliance infrastructure, particularly in host countries that are pivoting toward the U.S. sphere of influence. Second, firms should diversify operations across North Africa and Central Asia to avoid concentration risk in the Middle East. Third, Chinese firms should expand partnerships with local private enterprises and reduce dependence on state-level G2G frameworks, which are increasingly politicized. Lastly, where possible, de-dollarization strategies through RMB or euro-denominated transactions can help mitigate U.S.-controlled financial risk.

Trump's Middle East reset is not a blanket rejection of Chinese participation but a calculated reassertion of American leadership through competition, not conflict. For Chinese companies, this means not only navigating political sensitivity but also embracing a more flexible, decentralized, and compliance-driven approach. As the geopolitical and legal terrain shifts, resilience will favor those firms that adapt quickly to new rules, new alliances, and new realities.