The first 100 days has always been something of a benchmark for any new president. After all, it’s a quick way of assessing just how much impact the new leader has had in a short period, and which campaign promises are being delivered on first. In his second term, President Donald Trump has signed a number of executive orders and held in long press conferences where spoke on a number of different, and often unrelated, topics. These would almost always send the news media spinning, but for those of us in the UAE and wider Gulf region, the question remains: What will this Trump presidency mean for business in our region?
Part of the challenge is in keeping up with these rapid developments and figuring out their impact on business and economic ties between the US and GCC. It’s true there were some positive signs early on – even before Trump took office, a number of Gulf leaders visited him in Florida and reported the meetings to be constructive.
But where are we today? It’s well known that Trump’s approach to international relations has always been transactional more than anything else. It certainly doesn’t seem to be based on a particular ideology. For the GCC, though, this raises a critical question: will these transactions work in our favour? This is particularly important around energy, defence and tech since these areas have such a profound knock-on effect on the economy more widely and businesses of all sizes.
In short, Gulf businesses need to remain agile, try their best to anticipate possible shifts in trade policies and remain vigilant. Let’s now look at this in more detail.
Trade policies and tariffs
In his first two weeks, President Trump first threatened trade tariffs against some of America’s closest trading partners, including Canada, Mexico, and China. While the measures against Mexico and Canada are now on hold for a month, he has since imposed a 25% tariff on all aluminium and steel imports, regardless of country of origin.
This could have potential repercussions for the Gulf region, where metals exports form a significant part of the economy. The direct impact on the GCC remains unclear, though, and some analysts are still not certain how these policies will affect our region in real terms.
Beyond metals, the broader implications for Gulf economies lie in how these shifting trade dynamics affect global demand for oil and petrochemical products – key exports for many GCC nations. If major economies do in fact decide to impose countermeasures, or even shift their trade priorities, this could lead to fluctuations in oil prices that potentially impact government revenues and therefore business confidence.
Gulf banks will need to navigate this uncertainty with a degree of caution, with trade policies subject to frequent revisions. Financial institutions must maintain a long-term outlook, avoiding drastic shifts based on policies that could be amended or reversed. It won’t be easy. Stability and adaptability will be crucial as potential risks and opportunities are assessed.
Reason for optimism
If we go beyond the big headlines, we can find some reasons to be optimistic about the future of Gulf–US business relations during the next four years. It’s not all doom and gloom. Because while trade tensions and tariffs dominate the news, several developments do seem to suggest opportunities may arise for GCC businesses.
One such example is the MoU signed between Dubai Chambers and its US counterpart, aimed at strengthening trade ties and boosting economic cooperation. Specifically, the agreement will provide support for US companies looking to set up and invest in Dubai while also helping Dubai-based businesses expand into the US market. This kind of collaboration does demonstrate a shared interest in enhancing bilateral trade and investment.
Of course, Trump has long championed a pro-business stance, and early signs suggest this will continue. It was notable that a few weeks ago Emirati billionaire Hussain Sajwani announced a $20bn investment in US data centres, something Trump himself announced. This type of investment could set the stage for further Gulf activity in key sectors such as technology and infrastructure.
In terms of US interests in the GCC, clearly the UAE’s business-friendly environment makes it an attractive base for American firms. With tax incentives, streamlined regulations, and the world-famous free zones, the country remains a hub for US businesses seeking a foothold in the Middle East.
Then there is real estate which aligns with Trump’s historic business interests, and is the reason for his considerable wealth. His interest in large-scale real estate projects resonates well in the Gulf, where property development is a key economic driver. Trump has already been involved in a number of GCC-based real estate projects over the years, so shared ambitions in luxury developments and commercial real estate could signal opportunities for collaboration.
Trump pushing GCC towards EU
Since Trump’s return to office, a level of unpredictability has defined US trade policy, with many nations starting to reassess their economic partnerships. As Trump takes a more protectionist stance, including potential tariffs and trade barriers, GCC countries may find themselves looking increasingly towards Europe as an alternative strategic partner.
While the US has historically played a key role in trade and investment relations with the Gulf, if Trump does pursue aggressive tariffs or adopts policies that disrupt established trade flows in our region, GCC nations may look to diversify their economic alliances. Europe has a stable regulatory environment and a commitment to free trade which may present an appealing alternative. The EU and the GCC already share strong economic links and with the EU being one of the largest importers of Gulf oil and petrochemicals, there is a natural foundation for deeper collaboration.
If Trump imposes stricter trade policies, Gulf investors and sovereign wealth funds may also shift their focus towards European markets, increasing investments in real estate, technology, and industrial ventures. At the same time, EU-based companies could expand their operations in the Middle East, taking advantage of the region’s business-friendly regulations and growing consumer markets.
To be clear, the US is always going to remain a vital economic partner, but Trump’s unpredictable policies may push the GCC and Europe closer together.
Opportunities and challenges for the GCC
As we have seen, President Trump’s policies are shaping a sometimes unpredictable economic environment for GCC nations. While some of his policies may strengthen bilateral trade and investment, others pose challenges that require careful navigation.
While Trump’s pro-business stance and focus on economic deals could create fresh opportunities for Gulf businesses, high-profile investments that we have discussed suggest that GCC investors do remain engaged with the American market. Meanwhile, new trade agreements and MoUs highlight ongoing efforts to deepen economic ties.
As mentioned at the start of this article, policy uncertainty means Gulf nations must adopt a flexible and diversified approach to their global economic strategy. If Washington’s unpredictability increases, the GCC may look beyond traditional partners, strengthening relations with the European Union, China and other markets to mitigate risks.
Ultimately, the GCC’s economic future under Trump’s presidency will depend on how effectively it navigates these challenges.
