The UAE has recently enacted anti-dumping measures targeting Chinese imports, as disclosed by the Minister of Foreign Trade. This move comes in response to an influx of goods being rerouted to local markets after facing US and European tariffs.
During the World Economic Forum’s Annual Meeting in a session titled ‘Taming Trade’, Dr. Thani Al Zeyoudi, the UAE’s Minister of Foreign Trade, highlighted the UAE’s protective steps while staying true to its open-market principles.
“The UAE remains committed to openness, but we have initiated measures on seals over the past week due to significant dumping from China into our markets,” Al Zeyoudi stated.
Stay updated with the latest news. Follow KT on WhatsApp Channels.
The minister explained that Chinese products, facing barriers in the US and EU, are finding their way into other countries, exerting dumping pressure that threatens local industries. He emphasized the need for the UAE to shield its industries, “otherwise we’ll have to compensate one thing against another.”
10% US Tariff Baseline to Persist
Al Zeyoudi shared a sobering look at global trade, noting that the 10% US tariff will remain for at least three years. “The 10% won’t decrease. We must adapt,” he stated, based on talks with the US administration. “I foresee no reduction below 10% in the near future,” he added.
How the Tariff Situation Escalated
Al Zeyoudi provided rare insights into the escalation of tariffs beyond initial US intentions, citing unexpected reactions from China and other dynamics that “complicated the entire plan.”
The first was extreme reactions from countries like China, which escalated tensions, even within the US administration. The second was the unexpected acceptance by countries like Vietnam, prompting the US to demand more. “Countries like Vietnam emboldened the US by accepting conditions quickly,” he noted.
Unpredictability: A Major Business Challenge
While tariffs pose difficulties, Al Zeyoudi identified unpredictability as a core issue crippling business planning. “Businesses face unpredictability, causing constant tactical shifts,” he said.
UAE’s Strategic Trade Moves
Amidst global trade volatility, the UAE has pursued an aggressive trade diversification strategy with notable success. Al Zeyoudi revealed 32 Strategic Investment Partnership Agreements (SIPA) were completed in under four years, starting pre-Covid-19.
“We anticipated the need for diversity even before Covid, so we diversified our investments and trade,” he said, strengthening UAE’s position amidst the crisis with a vast trade network.
Crisis Accelerates Stalled Negotiations
The global trade crisis unexpectedly accelerated stalled negotiations for the UAE. Al Zeyoudi noted, “Countries are now taking action.” Mexico, previously unresponsive to free trade requests, is now engaged, and Mercosur negotiations have quickened.
Canada, once slow, concluded investment agreements in a month after renewed talks. The European Union is also negotiating with the UAE at an accelerated pace.
Trade Adapts Around Barriers
Despite challenges, Al Zeyoudi expressed confidence in trade’s resilience, likening it to water finding its path. However, he warned against abandoning traditional trade ties while exploring new routes, stressing the importance of maintaining supply chains and market diversity.
WTO’s Diminished Role
The Minister offered a nuanced view of the World Trade Organization’s current status, noting its reduced power but continued relevance. While larger economies move away, smaller and mid-sized economies adhere to WTO rules, maintaining global trade dynamics by bringing countries together.
“The rule-based system isn’t collapsing; it’s just losing historical power, yet it remains crucial for bringing most countries together,” Al Zeyoudi stated.
He confirmed that protecting certain sectors while remaining open is becoming a global standard, with countries assessing impacts “country by country” and focusing on “specific commodities.”
AI: The Answer to Trade Turbulence
Al Zeyoudi highlighted AI as the only viable solution to the current trade crisis. “The world wasn’t ready for this trade turbulence, and AI is seen as the solution,” he said.
He noted that trade tech solutions exist through World Economic Forum initiatives; they simply need implementation. “The technology and innovation are available; we must seek solutions that align with our interests.”
Private Sector Pioneers AI Adoption
Al Zeyoudi credited the private sector for leading AI use in navigating tariffs, especially for controlling tariff-induced inflation. While governments lag, the UAE government is ensuring AI is applied to policy analysis and decision-making.
He described AI’s transformative impact on global supply chains, addressing inefficiencies from extraction to consumer. Although massive data exists, it is underutilized, especially in logistics where documentation is burdensome.
“AI will play a major role in reducing timelines and enhancing commodity movement efficiencies,” he said.
The pandemic and trade disruptions accelerated this transformation, with logistics firms adapting quickly. Sophisticated multinationals use AI and data analytics to innovate brands and navigate tariffs, finding favorable conditions and creating new brands to tackle challenges.
“Businesses are innovating brands to maneuver challenges using data analytics,” Al Zeyoudi explained.
However, the UAE is managing re-export issues to avoid becoming a channel for tariff evasion that could harm local traders and manufacturers.
