Higher costs, competitive exports: UAE, GCC markets to be relatively 'unscathed' by Trump’s tariffs

Vijay Valecha, Khaleej Times, April 3, 2025

The UAE and GCC countries will face some indirect impact in select industries due to the new tariffs that US President Donald Trump rolled out on Wednesday, April 2, but the region will largely remain “unscathed”, according to experts.

The tariffs include 10 per cent to be imposed on the UAE, 10 per cent on Qatar, 20 per cent on Jordan, 10 per cent on Oman, 10 per cent on Bahrain, and 10 per cent on Saudi Arabia. The White House said that the new tariffs will come into effect on April 5, with the higher rates for some countries to be enforced starting April 9.

However, others pointed out that the region will be largely shielded from the brunt of the fallout these new tariffs could cause. “The GCC region, particularly the UAE, are likely to emerge relatively unscathed as America recorded a trade surplus with all six GCC nations in 2024,” said Vijay Valecha, chief investment officer at Century Financial.

“Tariffs are largely directed at countries where the US faces significant trade deficits, including Canada, Mexico, Japan, South Korea, the EU, and China, whose competitively priced exports challenge domestic manufacturers.”

Trump has declared April 2 as ‘Liberation Day’ as he rolled out sweeping tariffs, a move that could trigger a global trade war and upset the status quo in the markets. The details of the tariffs remain unclear but many foreign countries have promised retaliatory levies on goods.

Benefits

Vijay noted that these new tariffs could even benefit the UAE. “The additional costs often compel exporters to reroute trade through alternative markets, potentially boosting demand for transshipment hubs like Dubai's Jebel Ali,” he said.

“This can temporarily bump prices and handling times. Any disruptions to supply chains can boost demand for value-added logistics services in the GCC. However, rerouting trade creates operational challenges, such as longer routes, extra handling, and port congestion, which raise costs. Despite these uncertainties, opportunities exist for GCC logistics providers to navigate the evolving landscape.”

Source

Khaleej Times