What would lifting US sanctions on Syria mean to the war-torn country?

BEIRUT (AP) — President Donald Trump’s announcement that the U.S. will ease sanctions on Syria could eventually facilitate the country’s recovery from years of civil war and transform the lives of everyday Syrians.

But experts say it will take time, and the process for lifting the sanctions — some of which were first introduced 47 years ago — is unclear.

“I think people view sanctions as a switch that you turn on and off,” said Karam Shaar, a Syrian economist who runs the consultancy firm Karam Shaar Advisory Limited. “Far from it.”

Still, the move could bring much-needed investment to the country, which is emerging from decades of autocratic rule by the Assad family as well as the war. It needs tens of billions of dollars to restore its battered infrastructure and pull an estimated 90% of population out of poverty.

And Trump’s pledge has already had an effect: Syrians celebrated in streets across the country, and Arab leaders in neighboring nations that host millions of refugees who fled Syria’s war praised the announcement.

Washington has imposed three sanctions programs on Syria. In 1979, the country was designated a “state sponsor of terrorism” because its military was involved in neighboring Lebanon's civil war and had backed armed groups there, and eventually developed strong ties with the powerful militant Hezbollah group.

In 2003, then-President George W. Bush signed the Syria Accountability Act into law, as his administration faced off with Iran and Tehran-backed governments and groups in the Mideast. The legislation focused heavily on Syria's support of designated terror groups, its military presence in Lebanon, its alleged development of weapons of mass destruction, as well as oil smuggling and the backing of armed groups in Iraq after the U.S.-led invasion.

In 2019, during Trump's first term, he signed the Caesar Act, sanctioning Syrian troops and others responsible for atrocities committed during the civil war.

Caesar is the code name for a Syrian photographer who took thousands of photographs of victims of torture and other abuses and smuggled them out of the country. The images, taken between 2011 and 2013, were turned over to human rights advocates, exposing the scale of the Syrian government’s brutal crackdown on political opponents and dissidents during countrywide protests.

The sanctions — along with similar measures by other countries — have touched every part of the Syrian economy and everyday life in the country.

They have led to shortages of goods from fuel to medicine, and made it difficult for humanitarian agencies responding to receive funding and operate fully.

Companies around the world struggle to export to Syria, and Syrians struggle to import goods of any kind because nearly all financial transactions with the country are banned. That has led to a blossoming black market of smuggled goods.

Simple tasks like updating smartphones are difficult, if not impossible, and many people resort to virtual private networks, or VPNs, which mask online activity, to access the internet because many websites block users with Syrian IP addresses.

The impact was especially stark after a devastating 7.8 magnitude earthquake hit Turkey and northern Syria in February 2023, compounding the destruction and misery that the war had already brought.

Though the U.S. Treasury issued a six-month exemption on all financial transactions related to disaster relief, the measures had limited effect since banks and companies were nervous to take the risk, a phenomenon known as over-compliance.

Interim Syrian President Ahmad al-Sharaa — who led the insurgency that ousted President Bashar Assad — has argued the sanctions have outlived their purpose and are now only harming the Syrian people and ultimately preventing the country from any prospect of recovery.

Trump and al-Sharaa met Wednesday.

Washington eased some restrictions temporarily in January but did not lift the sanctions. Britain and the European Union have eased some of their measures.

After Trump’s announcement, Syria's currency gained 60% on Tuesday night — a signal of how transformational the removal of sanctions could be.

Still, it will take time to see any tangible impact on Syria's economy, experts say, but removing all three sanctions regimes could bring major changes to the lives of Syrians, given how all-encompassing the measures are.

It could mean banks could return to the international financial system or car repair shops could import spare parts from abroad. If the economy improves and reconstruction projects take off, many Syrian refugees who live in crowded tented encampments relying on aid to survive could decide to return home.

“If the situation stabilized and there were reforms, we will then see Syrians returning to their country if they were given opportunities as we expect,” says Lebanese economist Mounis Younes.

The easing of sanctions also has an important symbolic weight because it would signal that Syria is no longer a pariah, said Shaar.

Mathieu Rouquette, Mercy Corps’ country director for Syria, said the move "marks a potentially transformative moment for millions of Syrians who have endured more than 13 years of economic hardship, conflict, and displacement.”

But it all depends on how Washington goes about it.

“Unless enough layers of sanctions are peeled off, you cannot expect the positive impacts on Syria to start to appear,” said Shaar. “Even if you remove some of the top ones, the impact economically would still be nonexistent.”

Syrian men speak on their phones on a street in Damascus, Syria, Wednesday, May 14, 2025. (AP Photo/Omar Sanadiki)

Syrians line up to retrieve money from an ATM in Damascus, Syria, Wednesday, May 14, 2025. (AP Photo/Omar Sanadiki)

A restored apartment, top center, can be seen in an otherwise severely damaged apartment building in the Al-Waer neighborhood of Homs, Syria, Tuesday, May 13, 2025. (AP Photo/Ghaith Alsayed)

A girl holds a Saudi flag in Homs, Syria, Tuesday, May 13, 2025, as she celebrates U.S. President Donald Trump's plan to ease sanctions on Syria and normalize relations with its new government. Trump made the announcement on a visit to Saudi Arabia. (AP Photo/Omar Albam)

In this photo released by the Saudi Royal Palace, interim Syrian President Ahmad al-Sharaa shakes hands with U.S. President Donald Trump in Riyadh, Saudi Arabia, Wednesday, May 14, 2025. At right is Saudi Crown Prince Mohammed bin Salman. (Bandar Aljaloud/Saudi Royal Palace via AP)

NEW YORK (AP) — Reviving a campaign pledge, President Donald Trump wants a one-year, 10% cap on credit card interest rates, a move that could save Americans tens of billions of dollars but drew immediate opposition from an industry that has been in his corner.

Trump was not clear in his social media post Friday night whether a cap might take effect through executive action or legislation, though one Republican senator said he had spoken with the president and would work on a bill with his “full support.” Trump said he hoped it would be in place Jan. 20, one year after he took office.

Strong opposition is certain from Wall Street in addition to the credit card companies, which donated heavily to his 2024 campaign and have supported Trump's second-term agenda. Banks are making the argument that such a plan would most hurt poor people, at a time of economic concern, by curtailing or eliminating credit lines, driving them to high-cost alternatives like payday loans or pawnshops.

“We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%,” Trump wrote on his Truth Social platform.

Researchers who studied Trump’s campaign pledge after it was first announced found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back.

About 195 million people in the United States had credit cards in 2024 and were assessed $160 billion in interest charges, the Consumer Financial Protection Bureau says. Americans are now carrying more credit card debt than ever, to the tune of about $1.23 trillion, according to figures from the New York Federal Reserve for the third quarter last year.

Further, Americans are paying, on average, between 19.65% and 21.5% in interest on credit cards according to the Federal Reserve and other industry tracking sources. That has come down in the past year as the central bank lowered benchmark rates, but is near the highs since federal regulators started tracking credit card rates in the mid-1990s. That’s significantly higher than a decade ago, when the average credit card interest rate was roughly 12%.

The Republican administration has proved particularly friendly until now to the credit card industry.

Capital One got little resistance from the White House when it finalized its purchase and merger with Discover Financial in early 2025, a deal that created the nation’s largest credit card company. The Consumer Financial Protection Bureau, which is largely tasked with going after credit card companies for alleged wrongdoing, has been largely nonfunctional since Trump took office.

In a joint statement, the banking industry was opposed to Trump's proposal.

“If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," the American Bankers Association and allied groups said.

Bank lobbyists have long argued that lowering interest rates on their credit card products would require the banks to lend less to high-risk borrowers. When Congress enacted a cap on the fee that stores pay large banks when customers use a debit card, banks responded by removing all rewards and perks from those cards. Debit card rewards only recently have trickled back into consumers' hands. For example, United Airlines now has a debit card that gives miles with purchases.

The U.S. already places interest rate caps on some financial products and for some demographics. The Military Lending Act makes it illegal to charge active-duty service members more than 36% for any financial product. The national regulator for credit unions has capped interest rates on credit union credit cards at 18%.

Credit card companies earn three streams of revenue from their products: fees charged to merchants, fees charged to customers and the interest charged on balances. The argument from some researchers and left-leaning policymakers is that the banks earn enough revenue from merchants to keep them profitable if interest rates were capped.

"A 10% credit card interest cap would save Americans $100 billion a year without causing massive account closures, as banks claim. That’s because the few large banks that dominate the credit card market are making absolutely massive profits on customers at all income levels," said Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, who wrote the research on the industry's impact of Trump's proposal last year.

There are some historic examples that interest rate caps do cut off the less creditworthy to financial products because banks are not able to price risk correctly. Arkansas has a strictly enforced interest rate cap of 17% and evidence points to the poor and less creditworthy being cut out of consumer credit markets in the state. Shearer's research showed that an interest rate cap of 10% would likely result in banks lending less to those with credit scores below 600.

The White House did not respond to questions about how the president seeks to cap the rate or whether he has spoken with credit card companies about the idea.

Sen. Roger Marshall, R-Kan., who said he talked with Trump on Friday night, said the effort is meant to “lower costs for American families and to reign in greedy credit card companies who have been ripping off hardworking Americans for too long."

Legislation in both the House and the Senate would do what Trump is seeking.

Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., released a plan in February that would immediately cap interest rates at 10% for five years, hoping to use Trump’s campaign promise to build momentum for their measure.

Hours before Trump's post, Sanders said that the president, rather than working to cap interest rates, had taken steps to deregulate big banks that allowed them to charge much higher credit card fees.

Reps. Alexandria Ocasio-Cortez, D-N.Y., and Anna Paulina Luna, R-Fla., have proposed similar legislation. Ocasio-Cortez is a frequent political target of Trump, while Luna is a close ally of the president.

Seung Min Kim reported from West Palm Beach, Fla.

President Donald Trump arrives on Air Force One at Palm Beach International Airport, Friday, Jan. 9, 2025, in West Palm Beach, Fla. (AP Photo/Julia Demaree Nikhinson)

FILE - Visa and Mastercard credit cards are shown in Buffalo Grove, Ill., Feb. 8, 2024. (AP Photo/Nam Y. Huh, File)