Tariffs and Tech on the UAE’s Hit List as Trump Takes Charge

The chairman of Damac Properties, a company located in the United Arab Emirates, described Trump's reelection in November as "amazing news" and claimed that his family had been "waiting four years" to invest heavily in the US. Sources claim that Sajwani's opinions are in line with those of Gulf and Emirates stakeholders who value the president's ability to negotiate ruthlessly and close deals.

Trump's Economic Plans: Hope and Uncertainty

The blurred boundaries between Trump's private and public activities don't disturb them; in fact, they hope the two will cooperate for the sake of the area. According to Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington, there is both hope and apprehension regarding the economic objectives of the new US president.

On the first day of his administration, Trump promised to levy a variety of charges on imports from throughout the globe. Although neither specifically mentions the UAE or the Gulf, they are anticipated to reduce the competitiveness of regional goods, particularly those in the energy sector. In 2022, Emirati exports to the United States totaled $6.9 billion, rising 206% from 2012 and 10% from the year before.

Impact of Trump's Tariffs on the UAE Economy

According to Rachel Ziemba, founder of the consulting firm Ziemba Insights, the Trump tariffs' impact on the global and regional economy is the greater concern. Gulf currencies that are tied to the US dollar and local interest rates may rise together with the US currency and interest rates.

As a significant transshipment hub, the UAE would wish to take advantage of the shift in trade flows away from more expensive direct routes between the US, China, and other high-tariff countries.

According to Ziemba, the UAE's efforts to develop 24 comprehensive economic ties during the previous four years have also been hampered by a less free-trade-friendly world. Trump, however, is anticipated to provide new backing for the bitcoin sector.

US-UAE Relations: Opportunities and Challenges Ahead

Additionally, Emirati stakeholders will keep working to purchase cutting-edge US semiconductors. Trump is anticipated to continue the Biden administration's efforts to ring-fence artificial intelligence processors from China, which might lead to more agreements such as the one between G42 and Microsoft.

On innovation, the US and the UAE might agree. According to David Hamod, president and CEO of the National US-Arab Chamber of Commerce, the growing great power rivalry between Washington and Beijing might become a "thorny" challenge for the latter's "open door" foreign policy, which encompasses China and Russia.

According to Simon Henderson, director of the Gulf and energy policy program at The Washington Institute for Near East Policy, Saudi Arabia and the United Arab Emirates will undoubtedly vie for the attention of the returning president in a world that is busy and unpredictable.