Egypt’s Tough Choice: Gaza or Trump’s Pressure?

Egypt's Dilemma: Balancing Gaza and Trump’s Pressure

The Complex Relationship Between Egypt and the U.S.

Egyptian President Abdel Fattah el-Sisi and former U.S. President Donald Trump have shared a complicated dynamic. Trump famously referred to Sisi as his "favourite dictator" in 2019, yet his second term in office is causing deep concern in Cairo. His latest proposal—suggesting the forced relocation of Palestinians to Egypt and Jordan—has placed Egypt in an extremely delicate position. Alongside this proposition, Trump has also threatened to withdraw U.S. aid should these countries refuse to comply. For Egypt, the challenge now is to navigate these demands while safeguarding its own political and economic stability.

How Dependent is Egypt on U.S. Aid?

Egypt has long been one of the largest recipients of U.S. foreign aid, second only to Israel. Since 1946, the country has received $78 billion in economic assistance and $90 billion in military aid. The U.S. has annually provided $1.5 billion to Egypt, with $1.3 billion allocated to military support—essentially funding Egyptian arms purchases from American defense contractors.

This financial aid has cemented Egypt's role as a key strategic ally in the Middle East. The assistance not only maintains Cairo’s relationship with Washington but also strengthens the Egyptian military’s influence domestically. However, history has demonstrated that Egypt can withstand U.S. aid suspensions. When Washington froze military assistance after Sisi’s rise to power in 2013, Egypt sought financial support from Saudi Arabia and the UAE while diversifying its arms imports from France and Russia.

With shifting global alliances, Egypt has explored alternative funding sources. China’s growing influence and continued Gulf state investments may help mitigate the risks of U.S. aid cuts should Trump take a hardline stance.

Egypt's Balancing Act Between the U.S., Israel, and Arab States

Since the historic 1979 Egyptian-Israeli peace treaty, Egypt has carefully maintained its relations with the West, Israel, and the Arab world. While the treaty aligned Egypt with Israel diplomatically, it also led to its temporary expulsion from the Arab League. Cairo later re-established its role as a key Arab player while sustaining its peace agreement with Israel.

Over the decades, Egypt has positioned itself as a regional mediator, condemning Israeli aggression while ensuring peace and security. It has facilitated U.S. military operations and safeguarded the stability of the Suez Canal. Despite this, the current war in Gaza has significantly intensified Egypt’s geopolitical challenges.

How the Gaza War Threatens Egypt’s Position

The war in Gaza has placed Egypt in a difficult spot. Cairo is deeply concerned that Israel could attempt to forcibly relocate Palestinians to the Sinai Peninsula—an outcome Egyptian officials have firmly rejected. Egypt sees this as a "red line," fearing that such a move would not only destabilize the region but also be perceived as betraying the Palestinian cause.

Historically, Egypt has experienced the risks of Palestinian displacement firsthand. In 1955, an Israeli military raid in Egyptian-controlled Gaza resulted in 17 Egyptian soldiers killed, triggering a direct confrontation between Egyptian forces and Palestinian militants. This legacy continues to shape Egypt’s foreign policy, making the forced relocation of Palestinians a non-negotiable issue.

Additionally, Egypt is grappling with economic vulnerabilities exacerbated by the war. The Houthi attacks in the Red Sea, which began in 2024, have significantly reduced Suez Canal revenues, a critical source of foreign income. Sisi has warned European leaders that an economic collapse in Egypt could trigger mass migration to Europe, using these fears to secure financial support. However, such financial infusions alone cannot resolve Egypt’s deep-rooted economic struggles.

How Will Egypt Respond to Trump’s Proposal?

Trump’s suggestion to relocate Palestinians to Egypt has placed Sisi’s government in an untenable position. Accepting the plan would signify a stark departure from Egypt’s longstanding foreign policy and could incite widespread unrest among its population. On the other hand, outright rejection could strain U.S.-Egypt relations and jeopardize critical aid flows, forcing Cairo to rely more heavily on alternative financial backers like China and the Gulf states.

Egypt’s historical entanglement with the Palestinian issue ensures that its response to Trump’s policy will have far-reaching consequences. The coming months will test Cairo’s diplomatic agility as it seeks to maintain stability while resisting external pressures that threaten to upend its strategic balance.