UAE Experts Assess the Impact of Trump’s Tariffs on Businesses and Consumers

Government & Regulations

UAE Experts Assess the Impact of Trump’s Tariffs on Businesses and Consumers

The recent tariff announcement by U.S. President Donald Trump is expected to have a multifaceted impact on global markets, with particular consequences for GCC nations, including the UAE. Experts suggest that while the overall economic impact on the UAE may be minimal, certain sectors—especially aluminum exports—could face challenges. Meanwhile, consumers are likely to experience rising costs as inflationary pressures mount.

Trump’s Tariffs and GCC Trade Relations

On Wednesday, Trump imposed a 10% tariff on all imports to the U.S., including duties on GCC nations such as the UAE and Saudi Arabia, while Jordan faced a higher 20% tariff.

According to Hamza Dweik, Head of Trading and Pricing at Saxo Bank MENA, these tariffs will increase export costs, potentially reducing competitiveness in the U.S. market.

“We anticipate that the tariffs will increase export costs for GCC businesses, hindering their market share in the U.S.," said Dweik. "This could result in lower export volumes and revenues for businesses that heavily rely on American demand."

However, Vijay Valecha, Chief Investment Officer at Century Financial, downplayed the overall economic impact.

“Given the relatively low volume of trade between the U.S. and GCC countries, the tariffs are unlikely to cause significant economic harm,” Valecha explained.

Aluminum Industry Faces the Most Direct Impact

The aluminum sector is set to be one of the most affected, as GCC nations account for 16% of America’s aluminum imports.

Bahrain, Oman, Qatar, and Saudi Arabia are among the primary suppliers.
The UAE ranks second after Canada in supplying aluminum to the U.S.

Despite these challenges, Valecha emphasized that GCC producers have a competitive edge due to low energy costs.

“Any aluminum not purchased by the U.S. can be redirected to local infrastructure projects and electric vehicle production, supporting the region’s economic diversification efforts.”

Market Reactions and Global Trade Tensions

The announcement of these tougher-than-expected tariffs has triggered fears of a global trade war.

U.S. stocks tumbled, with the Dow Jones Industrial Average dropping 1,400 points (3.3%) and the Nasdaq Composite falling 5%.
Brent crude oil prices fell 7% to $69.71 per barrel.
Shares of multinational corporations such as Nike and Apple declined significantly.
“Trump’s aggressive tariff strategy adds uncertainty to global markets,” said Josh Gilbert, Market Analyst at eToro. "Investors now face increased volatility, lingering inflation risks, and escalating trade tensions."

International companies are closely monitoring the situation. DHL, a multinational logistics giant, stated:

“We must assess whether this leads to a broader U.S. disengagement from global trade and evaluate potential long-term effects,” said a company spokesperson.

Consumers to Feel the Biggest Impact

While businesses will adjust, some experts warn that consumers will bear the brunt of rising costs.

“This announcement brings

hort-term pessimism to global markets, and consumers should prepare for higher prices,” said Nayeem Aslam, Chief Investment Officer at Zaye Capital.

Gold prices have surged, and several consumer goods are expected to become more expensive.

Potential Ripple Effects on the UAE

Joseph Dahrieh, Managing Principal at Tickmill, noted that the tariffs could introduce trade risks for UAE exporters.

“A global growth slowdown, combined with oil price fluctuations, could create uncertainties, but the UAE’s strong economic fundamentals will help mitigate the impact.”

Dilin Wu, a research strategist at Pepperstone, emphasized that the UAE’s oil sector and investment climate could face indirect consequences.

“If the trade war weakens manufacturing, global economies may reduce energy consumption, lowering oil demand and impacting UAE export revenues.”

Additionally, Wu highlighted risks related to the UAE’s free trade zones and logistics sector:

“If multinational companies restructure supply chains or shift production elsewhere, the UAE could lose investment inflows, affecting its role as a global trade hub”

Conclusion: UAE’s Resilience Amidst Global Shifts

While Trump’s tariffs introduce new trade challenges, the UAE’s diversified economy, strategic location, and competitive advantages position it well to adapt to shifting global trade dynamics. However, businesses must stay agile, and consumers should prepare for inflationary pressures in the coming months.