Companies in the Middle East are bracing for a future with higher prices and increased costs but are still likely to face a relatively smaller direct hit from US President Donald Trump's reciprocal tariffs, analysts have said.
Egypt, Morocco, Lebanon, Iran and Sudan will have a tariff rate of 10 per cent. That is lower than levies on Israel of 17 per cent. Tunisia has a tariff rate of 28 per cent, Jordan 20 per cent, Algeria 30 per cent and Libya 31 per cent. Syria and Iraq are now subject to tariffs of 41 per cent and 39 per cent, respectively, indicating that Middle East countries will have varying fortunes with how their businesses are affected by the US tariffs.
Executives at regional companies are seeking further clarity on how the new levies will affect their operations and wider sectors, while preparing contingency plans to mitigate any potential fallout and adapting to disruptions to global trade.
"When businesses don’t know what trade will look like [in the] next quarter, they stop hiring, stop investing and freeze plans,” said Nigel Green, chief executive of global financial advisory giant deVere Group. "That ripples through to consumers. This chilling effect is how recessions begin."
Dubai-based DP World, the global ports operator with terminals from Peru to Australia, said on Thursday that businesses will face "significant" adjustments in response to the tariffs.
'With tariffs increasingly shaping policy, we recognise that businesses are facing significant adjustments," the company said in a statement to The National. "As supply chains realign, new manufacturing and trading hubs may emerge in response to shifting cost structures and market access considerations."
"For cargo owners, this environment brings challenges that require greater flexibility and adaptability. At DP World, we are working closely with our customers to navigate these complexities – helping them maintain continuity, find efficiencies and build resilience in an evolving global landscape."
The White House on Wednesday announced 10 per cent reciprocal tariffs on the UAE and Saudi Arabia, saying the two countries charge the US a similar amount.
Last year, the Office of the US Trade Representative reported a trading surplus of $19.5 billion with the UAE. US exports to the Emirates amounted to $27 billion, while UAE exports to America were valued at $7.5 billion. The primary exports from the UAE are precious stones and jewellery, followed by aluminium.
“Given the high-profit margins associated with precious stones and jewellery, and the UAE's status as a low-cost producer of aluminium, the impact on UAE businesses is expected to be minimal,” Deepak Mehra, chief economist at Commercial Bank of Dubai, told The National.
"Other exports from the UAE's private sector, such as electronics, machinery parts, optical equipment and plastics, are of lesser value and are unlikely to significantly affect local businesses. These businesses can either adjust their margins or find alternative markets that are closer and have lower shipping costs. Notably, there is minimal services trade between the US and the UAE."
The UAE steel companies said the US reciprocal tariffs do not apply to steel products, as the metal is already subject to the existing Section 232 framework, which imposes a 25 per cent tariff on such imports into the US.
This means Emirates' steel companies will continue to operate under the same regulatory conditions as before, said Michael Rion, chief commercial officer at Emirates Steel, part of the UAE's Emsteel Group.
The top exporters of aluminium to the US last year included Canada, with more than 3.15 million tonnes, the UAE (347,033 tonnes) and China (222,871 tonnes), according to US International Trade Administration data.
"Our exports to the US represent a limited portion of our overall sales, and as such, the direct impact on Emsteel is expected to be minimal," Mr Rion told The National.
However, such protectionist trade policies have broader implications for global steel trade flows.
"Steel exports originally destined for the US may be redirected to other markets, potentially affecting global pricing dynamics," Mr Rion said. "Additionally, major steel-producing countries, such as China, could shift their exports toward regional markets, which may exert competitive pressure on Gulf-based manufacturers."
Emsteel continues to adapt to global trade developments and leverage its diversified export portfolio, he said.
"While challenges exist, we see opportunities in strengthening regional trade" and exploring new markets, he added.
UAE cable maker Ducab said that while the new US tariffs pose some challenges, the company's strategy for diversified sourcing, supply chain agility, market expansion and strong supplier relationships equip it to mitigate these impacts effectively.
Ducab Metals Business, a unit of Ducab Group produces aluminium and copper rods used in the construction and power sectors, and exports to more than 75 countries. The US and Europe are its biggest markets for aluminium products.
"Ducab has structured its operations to navigate such shifts through diversified sourcing. This strategy ensures that the company is not overly reliant on any single source of materials, thereby reducing vulnerability to tariff-induced price fluctuations," Ducab group chief executive Mohammad Almutawa told The National.
Ducab is also focusing on expanding its export markets. "By broadening its customer base globally, the company can offset potential losses or increased costs in markets affected by the US tariffs," Mr Almutawa said.
The company's long-term partnerships with suppliers are helping in stabilising costs so that Ducab can secure materials at consistent prices, providing reliability for its customers, he added.
An agile supply chain strategy is also helping Ducab "to quickly adapt to changing market conditions and regulatory environments, ensuring that it can continue to meet customer demands without interruption", he said.
Potential benefits
While the UAE's economy could face "more pronounced effects" should oil prices decline due to escalating trade tension that affects global economic activity negatively, the country benefits from one of the lowest break-even oil prices in the Gulf, providing it with "a fiscal cushion" in the case of prolonged price weakness, Mr Mehra of the Commercial Bank of Dubai said.
UAE businesses may also stand to benefit from rising trade tension between the US and China, analysts have said.
"With a total of 54 per cent tariffs on Chinese goods, Chinese manufacturers may face excess capacity, leading them to offer products to the global market at reduced prices," Mr Mehra added. "This scenario would allow UAE-based businesses to source final products, raw materials and equipment from China at lower costs, enhancing their competitiveness by passing on better prices to their clients."
The 10 per cent tariff on Gulf countries may increase their exports to the US in relative terms because the tariffs applied to Gulf exporters are much lower than those on many major economies that compete with them in the US market.
"There may be opportunities in sectors where Gulf companies have US competitors in markets that respond by hiking tariffs on the US. I don't think there is much incentive for Gulf companies to invest in the US in order to 'avoid' the 10 per cent tariff rate, but the GCC's appeal as an investment destination should increase even more, as one of the remaining bastions of free trade," said Justin Alexander, director of Khalij Economics.
More expensive goods
The US tariffs will push prices higher on thousands of everyday goods – from phones to food – and that will fuel inflation at a time when it is already uncomfortably persistent, deVere Group said. “Tariffs are taxes – plain and simple – and American consumers will bear the brunt,” Mr Green said.
Dubai-based luxury retailer Chalhoub Group said it does not anticipate a big impact on its operations or consumers, as it operates largely in the Gulf and does not import many US products.
Andreu Marco, chief operations officer at Chalhoub Group, told The National: “We don’t import many products made in US. Even though we represent some American brands, their production is done mainly in Europe or in Asia.
"Import duties have not changed in the UAE with relation to these countries, so the impact for us is very small. If the UAE decides to increase import duties from these manufacturing countries, that would have an impact on us. But that’s not the case.”
Chalhoub Group does have a few exports to US currently, mainly products for its Level Shoes customers, who will have to pay higher prices for these as they are mainly made in Europe, so the price increase could be up to 20 per cent, Mr Marco said.
“They represent a small proportion of our global sales, because most of our customers and sales happen within GCC countries", especially Saudi Arabia and the UAE, he said.
However, retailers in the luxury fashion industry selling to the US market will be affected by the tariffs as many of these goods are made in the EU. This means US consumers will be “highly impacted” by a potential 20 per cent increase on prices, Mr Marco said.
Jacky’s Electronics expects trade between the US and UAE to be minimally affected, as the 10 per cent tariff is the baseline imposed on all countries.
“For us at Jacky’s, we would have been sourcing more from the US instead of selling into the US, so we don’t expect to see any major impact for ourselves,” said Ashish Panjabi, Jacky’s chief operating officer.
The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
Gearbox: Seven-speed automatic
Power: 770hp @ 8,500rpm
Torque: 720Nm @ 6,750rpm
Fuel economy: 19.6L / 100km
Mohammed bin Zayed Majlis
MATCH INFO:
Second Test
Pakistan v Australia, Tuesday-Saturday, 10am daily at Zayed Cricket Stadium, Abu Dhabi
Entrance is free
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
More on Quran memorisation:
Mohammed bin Zayed Majlis
The five pillars of Islam
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
The five pillars of Islam
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
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Barbie
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THE%20SWIMMERS
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
More coverage from the Future Forum
KILLING OF QASSEM SULEIMANI
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
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North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
Royal Birkdale Golf Course
Location: Southport, Merseyside, England
Established: 1889
Type: Private
Total holes: 18
Pad Man
Dir: R Balki
Starring: Akshay Kumar, Sonam Kapoor, Radhika Apte
Three-and-a-half stars
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
Killing of Qassem Suleimani
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Zayed Sustainability Prize
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
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The years Ramadan fell in May
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
Zayed Sustainability Prize
RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
Based: Ramallah, Palestine
Sector: Technology, Security
# of staff: 13
Investment: $745,000
Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors
Killing of Qassem Suleimani
The specs: 2018 BMW X2 and X3
Price, as tested: Dh255,150 (X2); Dh383,250 (X3)
Engine: 2.0-litre turbocharged inline four-cylinder (X2); 3.0-litre twin-turbo inline six-cylinder (X3)
Power 192hp @ 5,000rpm (X2); 355hp @ 5,500rpm (X3)
Torque: 280Nm @ 1,350rpm (X2); 500Nm @ 1,520rpm (X3)
Transmission: Seven-speed automatic (X2); Eight-speed automatic (X3)
Fuel consumption, combined: 5.7L / 100km (X2); 8.3L / 100km (X3)
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).
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Race card
1.45pm: Maiden Dh75,000 1,200m.
2.15pm: Maiden Dh75,000 1,200m.
2.45pm: Handicap Dh95,000 1,200m.
3.15pm: Handicap Dh120,000 1,400m.
3.45pm: Handicap Dh80,000 1,400m.
4.15pm: Handicap Dh90,000 1,800m.
4.45pm: Handicap Dh80,000 1,950m.
The National selections:
1.45pm: Galaxy Road – So Hi Speed
2.15pm: Majestic Thunder – Daltrey
2.45pm: Call To War – Taamol
3.15pm: Eqtiraan - Bochart
3.45pm: Kidd Malibu – Initial
4.15pm: Arroway – Arch Gold
4.35pm: Compliance - Muqaatil
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
ENGLAND SQUAD
Joe Root (captain), Dom Sibley, Rory Burns, Dan Lawrence, Ben Stokes, Ollie Pope, Ben Foakes (wicketkeeper), Moeen Ali, Olly Stone, Chris Woakes, Jack Leach, Stuart Broad
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