The tariff measures announced by US President Donald Trump are expected to have a limited effect on the Gulf region after his threat to introduce taxes of up to 25 per cent on Mexico and Canada by February 1, according to analysts.
There is still a lot of policy uncertainty as Mr Trump takes office. However, the Gulf doesn’t seem to be an area yet affected, according to Scott Livermore, Oxford Economics' chief economist for the Middle East and North Africa.
“A handful of Middle Eastern countries, including Bahrain and Oman, benefit from comprehensive free trade agreements with the US and most countries run a trade deficit with the US,” he said.
“Nevertheless, President Trump’s proposed tariff plans are certain to reverberate through global supply chains and demand. The GCC stands to lose in a less globalised world as the set of trade opportunities and partners shrinks, also potentially discouraging foreign direct investment. Country growth impact across the region will echo overall export exposure.”
Mr Trump said he planned to enact tariffs of as much as 25 per cent on Mexico and Canada by February 1, after he claimed that the two countries are allowing the flow of undocumented migrants and drugs into the US.
Mr Trump also indicated he was still considering a universal tariff on all imports to the US, but said he was “not ready for that yet”.
“You’d put a universal tariff on anybody doing business in the US, because they’re coming in and they’re stealing our wealth,” he said, adding that the introduction of such a tariff could be “rapid”.
In a post on Truth Social in November, Mr Trump warned he’d impose 25 per cent tariffs on all Mexican and Canadian imports as “one of my many first executive orders” and said it “will remain in effect until such time as drugs, in particular fentanyl, and all illegal aliens stop this invasion of our country”.
Mr Livermore said that in the BRICs bloc, future tariffs could be imposed on China, which may offer opportunities for some countries. However, most Middle Eastern economies are unlikely to draw in manufacturers relocating from China given their small populations and high wages, he said.
Egypt and Turkey could bring in some due to their proximity to Europe. However, Egypt suffers from poor infrastructure and a high administrative burden, while Turkey would be constrained by a recent decline in competitiveness, Mr Livermore said.
The GCC stands to lose in a less globalised world as the set of trade opportunities and partners shrinks
Scott Livermore,
Oxford Economics' chief economist for the Middle East and North Africa
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the main effect from any potential US tariffs on the region will probably be indirect, through their impact on global growth and energy demand.
“Tariffs on China will be particularly critical given its importance as an energy importer, while the weak demand backdrop in the eurozone would see further headwinds. Reduced global trade would also impact regional logistics activity,” she said.
“Nevertheless, we see the UAE’s global trade and economic integration continuing to rise and boosting its position as a trade and logistics hub, alongside attracting FDI.”
Another effect on the region will be through monetary policy, with higher import tariffs, tighter immigration policies and expansionary fiscal policies adding upside risks to the inflation outlook in the US, according to Ms Malik.
This will limit the pace of rate cuts by the Fed and thus the Gulf states – which mainly mirror US monetary policy moves, while the strong USD outlook will affect the external competitiveness of non-oil exports, she said.
“We remain positive on the region, particularly the UAE, given the trade and wider reforms. Greater investment activity and ongoing population growth are supportive of the outlook,” she added.
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Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
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