US President Donald Trump on Wednesday announced his intention to remove Syria from its list of designated state sponsors of terrorism for the first time in nearly 50 years, as the country still struggles to rebuild following the ouster of Bashar al-Assad in 2024.
The regime's corruption crippled the country’s economy and its infrastructure was devastated by years of war.
Trump made the announcement to his Syrian counterpart, Ahmed al-Sharaa , in a letter following their meeting in Ankara, the host city for this year’s NATO Summit.
In his letter, Trump said: "I promise to remove all barriers stopping you from rebuilding your country, and very soon, you will finally be able to do so," adding that the US has companies that are “ready to invest in Syria to help make the country greater and more prosperous than ever before."
President Sharaa has pledged to make rebuilding the country’s economy a top priority following years of war. He has called for international investment, reconstruction projects, currency stabilisation, and the lifting of sanctions, which he said hindered Syria’s reconstruction aspirations.
Sharaa has also sought to rebuild relations with neighbouring countries, particularly in the Arab world, and pushed for engagement with Western powers in a bid to encourage investment, which he says is essential for the country’s reconstruction.
More than 18 months after Assad's fall, the country is still facing huge struggles to rebuild, as numerous challenges, such as financial assistance, high poverty levels, and the colossal impact of the war on infrastructure, remain.
Will the 'terror list' removal help the economy?
The removal from the US 'terror' list could make foreign investors more willing to engage with Syria. Its lace on the list has hindered international companies, investors, and banks from working there due to the legal consequences this would have. Actively engaging with a country on the US’s terrorism sponsors list normally risks severe secondary sanctions, freezing of assets, and loss of vital financial or economic assistance.
A removal from the list will open up the reintegration of Syria into the global economy and help recovery, and could see a revival of several industries, including telecommunications - devastated by conflict which degraded national networks.
Banks will also be more willing to carry out transactions in Syria, making it easier for Syrian businesses to import goods and receive payments without the legal risks that come with doing business in a country carrying the SST designation.
Additionally, Syria will now have greater access to US assistance, including foreign aid, access to defence exports, and lifting limits on certain financial transactions.
More importantly, greater access to financial assistance and business interactions with the international community will ease Syria’s efforts to accelerate its rebuilding of schools, hospitals, energy plants, factories, and so on.
This could also pave the way for countries to interact more with Damascus on a diplomatic and economic level, now that the terror designation has been removed, and following years of diplomatic isolation.
Bassam Al-Kuwatli, the leader of the Syrian Liberal Party, hailed the move as a "good step," telling The New Arab that it will "allow banks to be less concerned about money transfers”, therefore “allowing Syrians to transfer money and do business in the country, at a lower cost".
However, Kuwatli warned that this decision is "not enough" to guarantee Syria’s economic recovery, pointing to certain challenges, such as the much-needed structural changes in how Syrians deal with banking.
"The rule of law, separation of powers, for big capital to be encouraged to come to the country, without those arrangements, very few will be encouraged to invest in Syria beyond oil and gas, and large projects."
He said economic projects, such as factories and agricultural projects, would suffer and not get the investment they need without structural change.
The US’s move, however, has raised questions on whether Washington expects a new deal of some kind with Syria , given US mediation and involvement in the Middle East.
Kuwatli said Trump could expect Damascus to have a role of some kind in Lebanon, after the US President appeared to suggest that Syria should "enter Lebanon to deal with Hezbollah" instead of Israel.
This stems from a report in March that suggested Washington was encouraging Sharaa to consider sending Syrian forces into Lebanon to help disarm Hezbollah. Damascus has denied having any such plans, while Lebanese President Joseph Aoun has expressed his confidence that Sharaa will not become involved in Lebanon’s internal matters.
"We are not sure how much Sharaa will be able to resist the pressure to be involved in Lebanon, and I hope Syria doesn't get involved because this would be very costly for both countries, in light of Israel’s continued occupation of both countries," Kuwatli added.
The removal of Syria's 'terror' designation comes after Congress repealed stringent sanctions imposed on Syria under the Caesar Act in December 2025.
Syria has already signed economic deals with states in the region, including a multi-billion dollar investment package with Saudi Arabia spanning aviation, energy, real estate, and telecommunications. Turkey has also engaged more deeply with Syria on an economic level, namely in aviation, telecommunications, and infrastructure, as it continues to exert its influence in the country.