Trump talks trade wars, but UAE has the upper-hand say analysts

The United Arab Emirates, and in particular its Emirates Global Aluminium (EGA) behemoth, supplies the United States with extremely high quality aluminium used by the US military in its shipbuilding, aircraft and weapons programs.
President Trump plans to impose a 25% tax on steel and aluminium imports to the US, but UAE is expected to see little direct impact.
President Trump plans to impose a 25% tax on steel and aluminium imports to the US, but UAE is expected to see little direct impact.

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US President Donald Trump this week reignited fears of a global trade war and economic downturn when he proposed 25% tariff hikes on steel and aluminium imports, but analysts say the move will not harm the UAE.

The United Arab Emirates, and in particular its Emirates Global Aluminium (EGA) behemoth, supplies the United States with extremely high quality aluminium used by the US military in its shipbuilding, aircraft and weapons programs.

According to a memo US Defence Secretary James Mattis sent to the Commerce Department last week, the US military sources just 3% of its aluminium domestically, largely because the US is not able to produce it in the same volumes and to the same quality as the UAE.

Danny Sebright, president of the US-UAE Business Council told Dubai Eye during a radio interview that the UAE would have the upper-hand in negotiating an exemption. “The UAE’s superior aluminium product is in high demand for US aerospace and defence products,” he said, and close bilateral ties will help initiate “quiet dialogue on the commerce and diplomatic levels to mitigate this.”

EGA for its part released a statement saying it was “well prepared” for any impact the tariffs may have.

“Alongside Asia, Europe, and the UAE, the United States is an important market for us,” an EGA spokesperson told Construction Week. “However we do not wish to comment at this stage, beyond saying that we are well-prepared for whatever market conditions may arise.”

World leaders have warned it could ignite a trade war with countries including Canada, China, and the EU. Trump is unperturbed by this, and earlier said that "trade wars are good, and easy to win”.

While the policy has drawn condemnation from world powers, US-based advocacy group the Aluminium Association praised the president.

In a statement, the trade body said: "We appreciate the President’s commitment to strengthening the US aluminium industry. We look forward to working with the President on implementation and to creating a more level playing field."

The tariffs have been strongly criticized by the International Monetary Fund and the director-general of World Trade Organization, Roberto Azevedo, has warned that it could even plunge the world into a “deep recession.”

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