Can Trump's Trade War Benefit Consumers?

How Could Trump's Trade War Lower Prices and Create More Jobs for Residents?

The United States' record-high tariffs on Chinese products have initiated significant changes in global trade. Manufacturers find it increasingly less profitable to ship goods directly from China to the USA, creating new opportunities for countries like the United Arab Emirates (UAE). Experts suggest that the UAE could be one of the biggest winners from the US-China trade tensions.

Strengthening the UAE's Role in Global Trade

Research examining an emirate with a financial and economic background shows that 77 percent of respondents believe the UAE will play a crucial role in international trade as a consequence of the 245 percent US tariffs imposed on China. This indicates that residents are not just passive observers, but also understand the advantages this realignment could bring to the region.

Interestingly, 82 percent of respondents believe that more goods will transit through the UAE to other countries, which enhances trust in local re-export and logistics infrastructure.

Realignment of Supply Chains

Due to the high US tariffs, many businesses are forced to find new routes to deliver their products. In this process, the UAE is becoming an increasingly attractive destination, notably because of its free-trade zones where companies benefit from a 0 percent corporate tax.

Chinese companies are expected to set up assembly plants in these zones and export finished products to the USA, as goods from the UAE face only a 10 percent tariff when entering the US market. This could provide a significant competitive advantage and aligns with the UAE's long-term strategy to serve as a commercial and manufacturing hub.

Significant growth is anticipated in the logistics, manufacturing, warehousing, and re-export sectors.

More Goods, Lower Prices?

One immediate consequence of the US tariffs is an overproduction crisis in China: warehouses are filled while American buyers have scaled back orders. As a result, Chinese manufacturers are turning to alternative markets – with the UAE appearing to be an ideal target.

UAE ports are fast, its warehouses are prepared, and consumer confidence in the region remains strong. This creates an ideal environment for the influx of Chinese goods, especially electronics, fashion products, and household items.

This abundant supply is expected to lead to significant discounts and price reductions for local consumers, particularly during seasonal sales events.

However, caution is also observed: if too many goods arrive simultaneously, a price collapse could occur, putting pressure on both manufacturers and retailers. But this could benefit consumers by providing greater choice and better prices.

The survey shows that 42 percent of interviewed emiratis expect price decreases, and 33 percent anticipate a wider selection on store shelves.

Strengthening the Role as a Re-export and Transshipment Hub

Many Chinese traders are already renting warehouses in the UAE to store and re-export their goods to other countries. This will generate healthy competition among local manufacturers and importers, which ultimately benefits consumers.

The long-term prospects are even more favorable: not only will re-export activities expand, but assembly and light manufacturing could also grow. According to the research, the shipping, warehousing, and manufacturing sectors will be the biggest beneficiaries, but retail and e-commerce will also profit from these changes.

The UAE’s appeal is not just in its geographical position: excellent port infrastructure, tax advantages, and stable governance contribute to its perception as a logistical center by more international companies.

Patience and Caution

While interest is high, some Chinese businessmen are biding their time: they are observing market developments to avoid overstock and overcrowding. Those who time their entry well could gain a substantial competitive advantage.

It is clear that this is not just about short-term movements: many Chinese companies plan to relocate parts of their operations to the UAE for the long term. This could bring more jobs and vibrant commerce to the region.

Warehouse demands have already noticeably increased, with more Chinese exporters and manufacturers seeking warehouses to securely store their goods until the next step.

Summary

The US-China trade war has triggered changes in global supply chains that the UAE can skillfully capitalize on. Its position could be strengthened on the global logistics map, while residents may experience lower prices, a wider selection, and more job opportunities in the near future.

(The source of the article is a press release from SixthFactor Consulting.)