Trump administration discussing currency swap line with UAE

The White House has discussed offering a financial lifeline to the United Arab Emirates as the U.S. war with Iran wreaks havoc on the Gulf state’s economy, a White House official told CNBC.

The UAE has not formally requested a currency swap line, and plans are not currently being drawn up, the official said, speaking on condition of anonymity to talk about nonpublic plans. Still, it is being discussed within the administration, the person said. Such a move would provide liquidity in dollars to the oil-rich UAE, but could be politically tenuous for the administration as U.S. consumers grapple with higher prices at home.

The UAE and other Persian Gulf nations have been hit hard by the U.S. war with Iran. Tehran has fired troves of missiles at the U.S.’ regional allies, damaging economic infrastructure. Iran’s closure of the Strait of Hormuz has also largely choked off oil exports that the UAE depends on for cash flow.

The UAE is a particularly close ally of the Trump administration, and has labored to extend overtures to Washington since Trump returned to the White House. The country committed to invest more than $1 trillion in the U.S. last year. The leaders of the Gulf nation are also reportedly intertwined with President Donald Trump‘s family business.

Trump, on CNBC’s “Squawk Box” Tuesday, appeared to say that he was willing to assist the UAE when asked directly about whether a currency swap was under consideration.

“If I could help them, I would,” the president said. “It’s been a good country. It’s been a good ally of ours.”

A potential currency swap line comes with political risk for Trump, however, as U.S. voters could view it as a bailout of a foreign country — and a wealthy one — while American consumers are swallowing higher prices.

The White House official said Trump sees the UAE as a major ally of the U.S. and is open to helping them, but cautioned that a swap is still “something we’re thinking about considering.”

A key Republican lawmaker on Tuesday appeared to be cautiously supportive of a potential swap.

“They’re such a strong ally in the Middle East, I think we should look at what needs to be done to help them through this difficult time,” Sen. Steve Daines, R-Mont., who sits on the Senate Finance and Foreign Relations Committees, said in a brief interview. “[Treasury] Secretary Bessent, he’s good at a lot of things, the one thing he’s really good at in his own experience before he was secretary was currency swaps.”

“I think it’s something that the secretary is moving in that direction, and I support him in that,” he said.

Democrats, however, are deeply skeptical of any deals the administration may make with the UAE.

“Anytime I’ve seen the president doing anything else with the UAE is to the benefit of the Trump family,” said Rep. Gregory Meeks, D-N.Y., the top Democrat on the House Foreign Affairs Committee. “I understand the UAE has been hit hard in that regard, and I want to make sure we help…