Business leaders in Dubai expect to weather the storm of US President Donald Trump’s sweeping worldwide tariffs, as long as the UAE continues to attract businesses through its free trade zones.
Mr Trump’s global tariff expansion and his escalation of a trade war on China has left countries scrambling for new trade agreements to minimise the impact of costlier exports to the US and a potential flooding of surplus Chinese goods.
Ahmed Bin Sulayem, CEO of the Dubai Multi Commodities Centre, a free trade zone and commodities exchange, is confident they will continue to grow, particularly in the software spheres of crypto, AI and gaming. “Innovation is being harnessed in Dubai to position the city as a global hub for AI and web3,” he said, speaking at London’s Asia House on Tuesday, in an event inviting UK companies to set up a base at the DMCC.
Another area for growth is the lab-grown diamond industry, which Mr Sulayem said should focus on producing diamond semiconductor wafers. “The real business and the money is in diamond wafers,” he said. He pointed to the Gemological Institute of America’s recent statement that it would respond to the new 10 per cent levy on diamond imports by bolstering its overseas services “specifically in Dubai and Hong Kong”, according to an FT report on Tuesday.
Amal Larhlid, a partner at PwC Middle East advising governments on sustainability, said the new tariffs present an “opportunity” for the UAE to attract more businesses. “Attracting more businesses into the ecosystem is going to be driven to a certain extent by the tariffs,” she said.
She said the UAE’s diversification away from oil, and its growing trade with countries to the east, would make it attractive to new businesses. She added that the UAE offered “political stability” and a focus on a long-term vision which means that taxes and tariffs are unlikely to change dramatically. “Uncertainty kills business. You don’t have that in the UAE because you have the political stability. The vision … is always about the long-term plan,” she said.
Software companies’ reliance on talent rather than hardware means they will easily move to the UAE provided the right working conditions are met, according to Christopher Meredith, a senior vice president at the American tech company Xsolla. “From a gaming point of view, it’s talent-based. If a person provides the best opportunity to be able to build and innovate and go to market whatever the effect of the tariffs, that’s going to stand true,” he said.
The company recently signed an agreement with the DMCC to grow the free trade zone’s gaming sector. Companies they work with in the UK have responded to tariffs and the volatile political climate by focusing on their short-term goals.
“I don’t know what the next five years are going to bring. I don’t know what the next 10 years are going to bring. Let's just focus on what's achievable in the short term around the parameters we know,” he said. “That means you have to be more flexible, more agile in terms of what you do, and that is a discipline that people are now starting to learn,” he said.
