US Tariffs Shake the Middle East
US President Trump signed an Executive Order in early April that imposed a 10% duty on goods imported into the US from the UAE. These tariffs, levied on April 9th, 2025, were paused a few days later but have nevertheless sent shockwaves through Middle Eastern economies and global trade.
From manufacturing to investment and real estate, the UAE economy continues to feel the effects of these tariffs and their potential to return. What does that mean for the budding entrepreneur, though? What does this mean for investors interested in business setups in the UAE?
Below, we’ll explore the far-reaching impacts of US-imposed tariffs, how they’re expected to change the UAE market, and how starting your business can still be lucrative even in uncertain times.
UAE Sectors Hit by US Tariff Announcements
Despite being paused for 90 days shortly after its enactment, the 10% duty on all goods from the UAE to the US caused a sharp reaction in the UAE market. This has led many investors to proceed with caution, fearing re-imposed tariffs and sudden policy changes are still possible.
In the span of days, trade costs increased, growth slowed, and trillions were wiped out from global stock market valuations. The Dow Jones average fell by over 1,500 points, and The Nasdaq collapsed nearly 25%.
What does this mean for businesses if tariffs are unpaused?
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Energy and Oil Revenue While crude oil itself is exempt from tariffs, surrounding industries and the overall demand are expected to diminish if tariffs are reinstated. This is expected to slow down the industrial sector and significantly reduce financial forecasts.
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Industrial Exports With the US being a major purchaser of aluminum, tariffs are forecasted to delay public projects and make products much more expensive for American buyers.
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Financial Markets As a result of tariff announcements, the Dubai Financial Market (DFM) declined by 3.1%, and banking stocks have downturned by 5%.
Opportunity is Abundant in the UAE
Despite the US tariffs having an overarching impact on business in the UAE and abroad, the UAE government remains insistent that industries in the region will weather the storm. There are ample opportunities for those interested in setting up a business in Dubai, and several markets are showing their potential even in the unlikeliest of times. Real estate remains highly popular in Dubai. Investors can take advantage of modern infrastructure, wide-ranging tax benefits, and business-positive regulations that offer stability even in unprecedented markets.
Manufacturing is also seeing a bump in activity, likely caused by global industries aiming to find alternatives to Chinese production.
Health and Medical Services are also prime sources for recession-proof investments. With a large population, healthcare, preventative medicine, and fitness are at the forefront of UAE citizen’s lives. This level of demand allows health services to survive and flourish through economic turmoil.
The Effects of US-Based Tariffs on Business Setup in Dubai
The UAE has long been a bastion for businesses seeking access to global markets and unparalleled tax incentives and policies. This fact has not been swayed much by American policy, as investors here can still enjoy a wide range of advantages. Starting your business in Dubai remains hassle-free with streamlined licensing, access to nationally recognized banking institutions, and a business-friendly environment.
Additionally, business startup consultants, like MSZ Consultancy, have the inside experience to guide new investors through unprecedented market shakeups and put them on the path to success and profitability.
The Advantages of Starting Your Business in Dubai
Why form your business in the UAE? Despite global market upheaval and uncertain futures, the UAE continues to make large strides in creating a prosperous business environment. Entrepreneurs here can take advantage of:
- 0% Corporate Taxes
- 100% Company Ownership
- Business-Friendly Regulations
- Recession-Proof Industries
- Full Repatriation of Profits
- A Stress-free Business Setup Experience
MSZ Consultancy is Your Choice for Business Formation in the UAE
From small startups to large corporate branches, MSZ Consultancy has over 15 years of experience and an unwavering dedication to making the startup process rewarding and straightforward. We handle every aspect of your business setup in Dubai, including licensing applications, visa processing, legal structuring, auditing, and more.
Give your business the leg up it deserves and find success in the UAE. Call our expert consultants today at +971 52 544 1248 for more information on our services, and find out how we can put your business on track for success in the modern age.
FAQs About US Tariffs and the UAE Economy
It’s not unusual to have questions about forming your business in Dubai. To shine a light on the matter, we’ve collected some of the most frequently asked questions about the subject.
How do US tariffs influence foreign investment in the UAE?
Answer: Changing policies can force investors to diversify their finances, change locations, and learn ways to adapt to new horizons.
What are the biggest negative impacts of US tariffs on the UAE?
Answer: Some of the biggest effects of potential tariffs include economic uncertainty, reduced potential for sales, changing networks and production chains, and market hesitancy.
What are some of the unlikely advantages of US tariffs for the UAE economy?
Answer: Increased competitiveness in the global market, the opportunity to take advantage of reduced Chinese exports, and new networking potential.
Can obtaining a Golden Visa help foreign investors plan around US trade policy?
Answer: Yes. Foreign investors escaping more unpredictable markets can leverage a Golden Visa to open a business in the UAE, where impacts are much more contained.
What are the steps to form my business in Dubai?
Answer: To start your company, you’ll need to choose a trade name, secure pre-approvals, gather and submit all required documents, and follow the steps outlined by the governing authorities.
