Syria taken off US terror blacklist after 47 years, paving way for investment
Trump made the announcement on 8 July after a meeting with Sharaa on the sidelines of the NATO summit in Turkey.
The US created the list in 1979 under the Export Administration Act, with Syria the first country to be added on 29 December.
The American administration of the time, under President Jimmy Carter, believed the Syrian government had supported international terrorist groups, with militant Palestinian operations working across the Middle East of particular concern.
Despite his former life as a jihadist, since coming to power in January 2025 following decades of hardline rule by the Assad family, Sharraa has attempted to cast himself as the unifier of a deeply divided country.
“From day one, when Ahmad al-Sharaa took Damascus, he talked about peace and reconciliation, reunifying the country,” Charles Lister, director of the Syria Initiative at the Middle East Institute said in a Frontline documentary in 2025.
“He talked about disarmament, demobilisation, and reintegration. He used all of the phrases that you would read in a textbook about a political transition."
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'A new chapter'
"This is yet another historic step by President Trump to give the Syrian people a chance at greatness," said US Secretary of State Marco Rubio in his announcement of Syria's removal from the blacklist.
Rubio said that he had notified Congress of the move – which will go into effect in 45 days, unless lawmakers block it.
“Lifting sanctions on Syria will unlock international trade and investment, give Syria a chance to rebuild, and open up a new chapter for the Syrian people. A stable, unified Syria at peace with itself and its neighbours benefits not only the region, but the entire world," he added.
Rubio also noted that the decision came after "formal assurances" by Sharaa that: "Syria will not support acts of international terrorism in the future." Donald Trump and Marco Rubio meet with Ahmad al-Sharaa and Saudi Crown Prince Mohammed bin Salman in Riyadh, 14 May, 2025.
Following the Iraq war in 2003, Syria was accused by the US and others of allowing foreign fighters to cross its border into Iraq. While Damascus denied supporting al-Qaeda linked militants, it was a widely held view that Syria did not do enough to stop their flow.
"Syria turned a blind eye to – and even facilitated – the flow of foreign jihadists pouring into Iraq across its border to fight the US occupation forces," the European Council on Foreign Relations wrote in 2013.
Such groups included the newly created Jabhat al-Nusra, which the European Council cited as the "most effective opposition fighting force in Syria [which] has established strong links with al-Qaeda in Iraq".
The leader of that group was Sharaa.
The onset of the civil war saw many terrorist organisations take root in Syria, given the collapse of state control in certain parts of the country, including the Islamic State in Syria (ISIS); Hayat Tahrir al Sham (HTS), the direct successor to Jabhat al-Nusra and affiliated with al-Qaeda, and the Kurdish Syrian Democratic Forces (SDF), which Turkey accuses of being affiliated with the Kurdistan Worker's Party (PKK), designated a foreign terrorist organisation by the US.
Sharaa rose to power as head of HTS, which eventually overthrew Bashar al-Assad. HTS later publicly severed ties with al-Qaeda, with an eye to gaining legitimacy as a base of governance both nationally and internationally.
Economic timeline
Since being designated a state sponsor of terror in 1979, Damascus has been restricted from US foreign assistance and exporting military and dual-use goods. Certain financial transactions were also blocked, as was support from US-backed international financial institutions.
Despite those restrictions, the Syrian economy saw slow growth up until the Iraq war in 2003.
The 1969 constitution under Salah Jadid, the de facto leader of Ba'athist Syria from 1966 until 1970, stipulated that the country would be run according to a "planned socialist" system.
After ousting Jadid, Hafez al-Assad nonetheless maintained this and implemented large-scale development projects to expand industry, agriculture and infrastructure.
Agriculture made up 22-25 percent of Syria's GDP during the 1960s and early 1970s, according to the World Bank.
The OPEC oil crises of the 1970s saw Syria achieve high rates of economic growth, coupled with a boost from remittances from Syrians working abroad in oil-rich Arab states such as Saudi Arabia.
Entering the 1980s, Syria's economy had shifted from a traditional agrarian base to one led by the service, industrial and commercial sectors. Syrian oil exports also began to surge during the 1980s and 1990s, through the investment of European companies such as Shell and Total.
Between the 1970s and the 1990s, Syria was considered to have a middle-income position among the other Arab states – less prosperous than the oil-rich Gulf monarchies of Saudi Arabia or the United Arab Emirates, but better off than other countries such as Yemen or Sudan.
The cost of reconstruction
From the year 2000, when Bashar al-Assad took the reigns of the country from his father, the economy grew at a moderate pace, with the IMF estimating annual real GDP growth at around 4-5 percent before the civil war in 2011.
From 2004 until the start of the civil war, Washington imposed harsher sanctions under the Syria Accountability Act, further restricting the country's exports and financial dealings. However, Syria maintained strong trade ties with its largest trading partner, the European Union, and with Turkey, Iraq, Lebanon and the Gulf countries.
But the civil war and the ensuing Islamic State caliphate, along with the refugee crisis, decimated the Syrian economy – meaning Damascus must now seek support to rebuild its country.
The World Bank estimates the cost of post-war reconstruction at more than $216 billion.
“Now, more than ever, it is imperative for the international community to mobilise support and partnership to help Syria restore essential infrastructure, revitalise communities, and lay the foundation for a more resilient future for its people," said Syria's Minister of Finance Mohammed Yisr Barnieh in October 2025.
While Sharaa's Islamist base appears to have mixed feelings about his relationship with the US, notably its policy of supporting Israel, "they recognise that Trump's support is incredibly important for Syria's stability and the new government's survival”, Aron Lund, a Middle East analyst at the Swedish Defense Research Agency, told RFI.
He added that there's not "much real trust or ideological sympathy on either side, but they're working well together and seem to have struck up a good personal rapport”.