UAE: How Trump's tariffs could help residents get lower prices, more jobs

Khaleej Times

26-04-2025

The UAE could emerge as one of the biggest beneficiaries of the ongoing trade tensions between the US and China, according to experts.
As the US imposes steep tariffs on Chinese goods, businesses and consumers in the UAE are anticipating a shift in global trade flows, positioning the country as an important and key player in global logistics and re-exports, experts told Khaleej Times.
A study by SixthFactor Consulting involving 100 Emiratis with finance and economics backgrounds revealed that 77 per cent believe the UAE will become more important for global trade due to the US' decision to impose a 245 per cent tariff on Chinese products. This highlights the country's growing role as a critical link between the East and West.
'Consumers aren't just watching from the sidelines,' said Himanshu Vashishtha, CEO of SixthFactor Consulting. 'They understand the UAE's global leverage and are optimistic that these shifts can benefit the region economically.
The study also found that 82 per cent of respondents expect more goods to pass through the UAE to other countries, indicating strong faith in the country's re-export capabilities and logistics infrastructure.
Shift in supply chains
The high tariffs on Chinese goods entering the US have made it less feasible for manufacturers to ship directly from China. This is pushing many businesses to explore alternate routes, and the UAE is emerging as a preferred hub.
According to CA Harikishan Rankawat, managing partner of RNG Auditors, Chinese companies may start setting up assembly plants in the UAE, particularly in designated free zones that offer 0 per cent corporate tax.
'Since the UAE only has a 10 per cent tariff when exporting to the US, compared to China's 245 per cent, many Chinese firms might choose to assemble products here and re-export,' he said. 'It makes economic sense and also fits the UAE's long-term vision of being a trade and manufacturing hub.'
'These changes are likely to give a boost to several sectors, including logistics, manufacturing, warehousing, and re-exports,' added Rankawat.
More goods, lower prices?
One immediate consequence of the tariffs is the accumulation of surplus stock in China. With US buyers holding off on purchases, manufacturers are left with overflowing warehouses and nowhere to ship their goods.
'China has a spillover of surplus goods and not many buyers in the US right now. So, they are turning to other countries, mainly the UAE, to sell their goods,' said Mujeeb Rahman, deputy general manager at Stars Global Shipping and Logistics.
'Our ports work well, warehouses are ready, and people in the region are still buying. It's a perfect match for Chinese manufacturers' interest,' added Rahman.
Jason (Li Jun), a Dubai-based trader who imports lighting and construction materials from China, said, 'The factories and warehouses in China are full. Some buyers in the US have paused orders. We are now assessing whether to bring goods into Dubai, but there is a risk, if everyone does it at once, prices will crash,' said Jason, who operates in Dragon Mart 1.
But that same risk could turn into an opportunity for UAE consumers. 'As surplus Chinese products are redirected to the Gulf, it could lead to lower prices on electronics, fashion, and home goods, especially during seasonal sales,' added Jason.
Chen Wei (Victor), another businessman in Dragon Mart dealing in apparel and accessories, said: 'Thousands of jackets, sneakers, and handbags are sitting in our partners' warehouses in Yiwu and Guangzhou. Once these are redirected to the Middle East, UAE retailers will benefit from lower sourcing costs, and shoppers may see big discounts.'
The SixthFactor study found that 42 per cent of Emirati respondents expect product prices to go down, and 33 per cent believe they will see more choices on the shelves. However, 17 per cent fear possible shortages, and 8 per cent don't expect to be impacted at all.
Re-export and transhipment
'Chinese traders are already here, renting warehouses, storing their goods, and preparing for re-export,' said Rahman.
'This will lead to a healthy competition between UAE-based manufacturers and importers. But ultimately, the big winner will be the consumer,' added Rahman.
Experts say that the US-China tariff war could lead to a long-term restructuring of global supply chains, and the UAE is well-positioned to benefit. Not just for re-exports, but as a key location for assembly and light manufacturing.
The SixthFactor study also showed that Emiratis view shipping, warehousing, and manufacturing as the top sectors that will benefit, followed by retail and e-commerce.
'When we asked what makes the UAE attractive, respondents didn't just say location, they mentioned governance, port quality, and tax benefits. That shows people understand the whole ecosystem, not just one advantage,' Vashishtha.
Patience is the key
Some Chinese businessmen are being cautious and are waiting to see if the demand in the UAE and nearby markets can actually take their goods before committing to large shipments.
'Timing is everything. If we move too early, and the market gets flooded. But if we wait too long, we may miss out,' said Jason.
Along with being caution, businessmen are enthusiastic and watching for signals. 'There's a lot of hope, but also uncertainty,' said Victor. 'We are staying alert. Because once the surplus come into the UAE, those with the right connections will come out on top.'
Increased demand for warehouse
Shipping and logistics companies are noticing rising interest from Chinese exporters and manufacturers for warehouses and manufacturing units set up in the UAE. 'We are already getting more calls from Chinese companies looking for storage. Some are renting big spaces just to keep their goods safe while they plan their next move,' said Rahman.
'This isn't just for now, it could bring long-term benefits. More Chinese companies might move parts of their business here. That means more jobs and more trade for the UAE,' added Rahman.