“Economic Consequences of a Trump Presidency Redux”, Op-ed for CNN Business Arabic, 14 Jan 2025

The opinion piece is available in both English & Arabic.

The Arabic version titled “التداعيات الاقتصادية لعودة ترامب” was published in CNN Business Arabic on 14th January 2025 and can be accessed here & below.

 

The English version of the article:

Economic Consequences of a Trump Presidency Redux

The world is in a much different configuration compared to the previous Trump Presidency years, with multiple multi-year wars, growing trade and investment fragmentation [1], burgeoning global debt [2], an expanding BRICS+, an AI transformation unfolding , while 2024 is the first year above 1.5C of global warming [3]. Cold War II and a new world order are emerging.

Domestic policies to trigger inflation and lead to higher rates for longer. Trump second-term MAGAnomics- potentially a combination of tariffs, protectionism, tax cuts and a crackdown on immigration – with an already booming US economy, is inflationary in nature, leading to even higher US budget deficits [4] and debt [5]. A flareup in inflation would lead the US Fed to delay lowering interest rates and monetary easing, while other major central banks are easing rates (including the ECB and Bank of England). MAGAnomics policies would strengthen the dollar and increase US trade deficits. Higher-for-longer interest rates and a strong US dollar will negatively affect emerging markets and countries with high external debt-to-GDP, further exacerbating a growing global debt crisis and threatening socio-economic stability at a time when 48 developing countries spend more on interest payments than on either education or health [6].

Drill baby drill! The Trump administration would stimulate the fossil fuel industry, remove drilling restrictions from areas extending from Alaska to the Gulf and accelerate the building of oil and gas pipelines. The US is already a major oil and gas exporter (with Russia sanctioned and displaced from EU markets), maintaining its position as the top global exporter of LNG in 2024 [7]. Deregulation of US oil and gas would increase domestic production, lead to increased supplies and a downward impact on oil prices in addition to greater competition in export markets. This could adversely affect the GCC, with a consequent negative impact on their fiscal and current account balances.

Trade tariffs and protectionism. An intensification of US protectionist policies, justified on grounds of security or strategic interest, would exacerbate global trade tensions and lead to retaliatory actions. An increase in global trade and investment barriers would be anti-competitive, disrupt markets, and further distort global supply chains [8]. Higher and more encompassing tariffs on China, given ongoing tech wars and de-coupling measures, could slow growth, but China would likely counter with countervailing trade and investment measures, expanding markets in the global South, deepening BRICS+ economic integration. Strategically, US and EU decoupling from China can play in the GCC’s favour through bilateral trade diversion and investment and economic partnership [9] with China.

 Pause button on climate commitments. Even as LA tries desperately to contain blazing fires, the current Trump/ Republican narrative is one of climate denial, making it more likely that the Trump administration will repeal many of the Biden-era policies, and reverse US international climate commitments. Recall that the US exited the Paris Climate Agreement under Trump. Reduced US spending on climate risk mitigation and adaptation, as well as delays in combatting GHG pollution raises global climate risks. Climate change does not recognise any borders!

The coming decade will be hotter if the underinvestment in combatting climate change is not reversed. This necessitates massive investment in clean and renewable energy and climate tech. The shift in climate related policies in the US offers an opportunity for the GCC. The GCC can build on their comparative advantage by increasing their clean energy investments, with an aim to export renewable energy as well as related climate technology (such as solar power, hydrogen, desalination, district cooling, desert agriculture).

No more wars? Statements about the “acquisition” of Greenland or Canada as the 51st US State notwithstanding, it is widely expected that Trump will not support ongoing wars. Whether Trump will be supportive of a deal to rebuild Gaza / Lebanon / Syria [10] or how he will deal with the Russia-Ukraine war will have a direct impact on the infrastructure industry, and oil and food markets. Of more far-reaching consequence would be if there are plans for more active use of the US military [11] – the anti-China and anti-Iran stance could lead to confrontation and increased sanctions; Cold War II would become warmer. If so, higher geopolitical risk would lead to increased defence spending, higher CDS rates, reduced capital inflows and FDI and a global recession.

The bottom line is that a second Trump term will be disruptive and turbulent. Uncertainty is the name of the game as the world waits to see what policies will be implemented once the President is inaugurated come Jan 20th. A global recession is a less likely scenario unless the beggar -thy-neighbour trade measures spread through the global economy, dragging everyone down.

 

 

التداعيات الاقتصادية لعودة ترامب

اختلفت الصورة العالمية كثيراً مقارنة بفترة ترامب الرئاسية الأولى؛ حروب على جبهات متعددة مستمرة منذ سنوات، واختلافات وتوترات تجارية واستثمارية بين الدول مترافقة مع ارتفاع هائل في الدين العالمي وتوقعات بتخطيه 100 تريليون دولار هذا العام، وتوسع في مجموعة بريكس وتحول نحو الذكاء الاصطناعي، هذا بينما سجّل عام 2024 أول ارتفاع بـ1.5 درجة بحرارة الأرض.. الحرب الباردة الثانية والنظام العالمي الجديد على الأبواب.
سياسات ترامب الداخلية سترفع التضخم وتقود لفائدة أعلى لفترة أطول
الولاية الثانية من سياسات ترامب المعروفة بمصطلحMAGAnomics والتي هي عبارة عن مزيج من التعريفات الجمركية والحمائية التجارية وتخفيض في الضرائب مترافق مع تضييق على الهجرة غير الشرعية ستأتي في ظل اقتصاد أميركي ينمو بقوة، وبالتالي ستكون ذات طبيعة تضخمية وستقود إلى عجز أعلى في الميزانية الأميركية وارتفاع في الدين أيضاً، حيث إن تمديد سياسات الخفض الضريبي التي أقرها ترامب لمدة 10 سنوات أخرى ستُضيف 4.6 تريليون دولار إلى الدين الأميركي المتفاقم أصلاً.
إن أي إشارة إلى ارتفاع التضخم ستجعل الفيدرالي يتمهل في سياسة خفض الفائدة والتيسير النقدي، فيما بقية البنوك المركزية الكبرى كالأوروبي وبنك إنجلترا تخفّض الفائدة.
سياسة الـMAGAnomics ستقوّي الدولار وسترفع العجز التجاري الأميركي.
فائدة أعلى -لفترة أطول- ودولار قوي سيؤثّران سلباً في الأسواق الناشئة والدول التي لديها نسبة مرتفعة من الدين إلى الناتج المحلي الإجمالي، وبالتالي ستفاقم خطورة الوصول إلى أزمة دين عالمية، وتهدد الاستقرار الاقتصادي الاجتماعي في الوقت الذي تنفق فيه 48 دولة على مدفوعات فوائد الدين أكثر مما تنفق على التعليم والصحة.
الحفر ثم الحفر!
إدارة ترامب ستُنعش صناعة النفط الأحفوري، وستُزيل التقييدات كلها على مناطق التنقيب من آلاسكا إلى خليج المكسيك وستسرّع عملية بناء خطوط الأنابيب.
تعتبر الولايات المتحدة من أكبر مصدري النفط والغاز في العالم، لا سيما مع العقوبات على روسيا وإبعادها عن السوق الأوروبية، وقد حافظت على مركزها كأكبر مصدر في العالم للغاز المسال في 2024.
إعطاء الحرية لصناعة النفط والغاز سترفع الإنتاج المحلي وتزيد المعروض العالمي وبالتالي ستضغط على أسعار النفط وستُشعل المنافسة في سوق الصادرات العالمية.. هذا قد يحمل بعض التأثير السلبي في ميزانيات دول الخليج العربي التي تعتمد على النفط بشكلٍ كبير.
التعريفات الجمركية والحمائية التجارية
التركيز على سياسات الحمائية التجارية -المبررة بحماية الأمن القومي الاستراتيجي- سيزيد التوتر في التجارة العالمية ويقود إلى إجراءات مضادة انتقامية.
العوائق التجارية وارتفاع حدة الحمائية ستضر بالتنافسية وتعطل الأسواق وسلاسل الإمداد العالمية.
تعريفات جمركية أعلى وأشمل على الصين -مع الأخذ بعين الاعتبار الحرب التكنولوجية القائمة حالياً- ستضر بالنمو، لكن الصين ستتخذ إجراءات مضادة منها التجارية ومنها تقييد الاستثمارات والتوسع في أسواق “الجنوب” العالمي، بالإضافة إلى تعميق العلاقات مع مجموعة بريكس+ والتكامل معها.
استراتيجياً، إن فصل العلاقات أو فتورها بين أميركا والاتحاد الأوروبي مع الصين سيلعب دوراً في صالح دول الخليج العربي، التي ستستفيد من اتفاقيات تجارية ثنائية وشراكات اقتصادية مع الصين.
إيقاف الالتزامات المناخية!
حتى مع صراع لوس أنجلوس لاحتواء الحرائق الهائلة التي لم تحصل في تاريخها، لكن لهجة ترامب والجمهوريين لا تزال بإنكار كل ما يتعلق بالتغيّر المناخي، ما يجعل التوقعات تصب بأن يعكس ترامب القوانين البيئية كلّها التي صدرت في حقبة بايدن، ويعكس التزامات أميركا كافة في ما يتعلق بالمناخ.
وبالعودة إلى الوراء، لا ننسى أن الولايات المتحدة انسحبت من اتفاقية باريس للمناخ في ولاية ترامب الأولى، وقلصت الإنفاق على تبنّي إجراءات محاربة التغيّر المناخي وتقليص مخاطره، والتأخر في محاربة التلوث الناتج عن غازات الدفيئة، لكن لم يتم الأخذ بالاعتبار حينها أن التغيّر المناخي لا يقتصر على دولة بذاتها ولا يعرف حدوداً.
العقد المقبل سيكون أكثر حرارة خصوصاً إذا لم يتم تعويض النقص الهائل في الاستثمارات المخصصة لمحاربة التغيّر المناخي.. هذا يتطلب ضخ استثمارات هائلة في الطاقة النظيفة والمتجددة وتكنولوجيا المناخ.
التغيّر في السياسات المناخية الأميركية يشكّل فرصة لدول الخليج العربي.. دول الخليج تستطيع البناء على الميزات التي تمتلكها بزيادة استثماراتها في الطاقات النظيفة، مستهدفة تصدير هذه الطاقات الفائضة بالإضافة إلى تصدير منتجات متعلقة بها كالألواح الشمسية والهيدروجين الأخضر ومشاريع تحلية المياه وتبريد المناطق والزراعة الصحراوية.
لا مزيد من الحروب!
إعلانات ترامب المتكررة عن “الاستحواذ” على غرينلاند أو جعل كندا الولاية الحادية والخمسين غالباً ما يتم تجاهلها، لكن من المتوقع ألّا تدعم إدارة ترامب أي حروب قائمة.
مهما كان قرار ترامب بدعم إعادة الإعمار في غزة ولبنان وسوريا، وكيفية تعامله مع الحرب الروسية الأوكرانية سيكون له تأثير عظيم على قطاع البنية التحتية وعلى قطاع النفط والغذاء على حد سواء.
بالتأكيد ستكون هناك تبعات كبرى لو كانت هناك خطط قادمة لاستخدام القوة العسكرية الأميركية بشكل أكبر، اللهجة المعادية للصين والمعادية لإيران قد تفضي إلى المزيد من المواجهات أو على الأقل المزيد من العقوبات؛ الحرب الباردة الثانية ستزداد سخونة!
إذا حدث هذا، فبالتأكيد المخاطر الجيوسياسية ستؤدي إلى زيادة الإنفاق الدفاعي، وتكلفة أكبر للتأمين على وتعثر الديون أو الـCDS، وتقلص الاستثمارات الرأسمالية والاستثمارات العابرة للحدود، وبالتالي ركود عالمي.
خلاصة القول إن الفترة الرئاسية الثانية لترامب ستكون مليئة بالمطبات
عنوان المرحلة سيكون “عدم اليقين”، العالم سينتظر أي سياسات سيطبقها ترامب من لحظة دخوله إلى البيت الأبيض في الـ20 من يناير الحالي.. ركود عالمي هو السيناريو الأقل حدوثاً إلّا إذا بدأت الدول جميعها تطبيق سياسة “أنا أولا” في التجارة الدولية -وهي السياسة التي يسوّق لها ترامب في الولايات المتحدة- وبالتالي الجميع سيخسرون.

 

[1] Gopinath et al (2024) find significant declines in trade and FDI flows between countries in geopolitically distant blocs are 12% and 20% respectively lower relative to flows between countries in the same bloc since the onset of the war in Ukraine

[2] It is forecast to cross USD 100trn, with a USD 5trn increase since 2023.

[3] https://www.reuters.com/business/environment/2024-was-first-year-above-15c-global-warming-scientists-say-2025-01-10/  

[4] Trump’s 2017 Tax Cuts and Jobs Act’s reduction in corporate taxes was permanent, but much of the rest of the law, including cuts to personal income taxes, is set to expire at the end of 2025. If Trump extends these cuts for the next decade, a highly probable scenario, it could add approximately USD 4.6 trillion to the burgeoning national debt, according to a Congressional Budget Office report.

[5] Trump added USD 4.8 trillion in non-Covid debt, and Biden added another USD 2.2 trillion, according to the Committee for a Responsible Federal Budget.

[6] UNCTAD, June 2024.

[7] LNG exports hit 88.3 million metric tonnes (MT) in 2024, up from 84.5 MT in 2023, according to LSEG data.

[8] The Smoot-Hawley Tariff Act of 1930, which raised average tariffs on imports by around 20% and incited a tit-for-tat trade war, was devastatingly effective: global trade fell by two-thirds. Simon Evenett (2024) outlined various scenarios with retaliatory measures to US tariffs: in the case where the US imposes tariffs and countries retaliate against the US, the attractiveness of US as an export base declines; in a scenario where countries retaliate to US tariff hikes with tariffs on all its trading partners, there would be a tariff-drive contraction in global goods trade, eventually leading to a competitive devaluation spiral.

[9] https://nassersaidi.com/2024/12/11/uae-china-partnership-for-a-transforming-global-economic-geography-presentation-at-the-china-uae-investment-summit-abu-dhabi-finance-week-10-dec-2024/

[10] https://www.agbi.com/opinion/development/2024/11/trump-must-focus-on-rebuilding-a-war-torn-middle-east/

[11] The US already spends more on its military than the rest of the top 10 highest spending countries combined.




Interview with Al Arabiya (Arabic) on Trump’s election victory, potential policies & impact, 6 Nov 2024

 

In this TV interview with Al Arabiya aired on 6th Nov 2024, Dr. Nasser Saidi discusses Trump’s election victory, potential domestic policies (leading to wider deficits) and impact on GCC & wider Middle East. 

 

Watch the TV interview via this link 

 

هل يتمكن ترامب من تخفيض العجز؟

قال رئيس شركة ناصر السعيدي وشركاه الدكتور ناصر السعيدي، إن انتصار دونالد ترامب في انتخابات الرئاسة الأميركية “تاريخي”، كونه أول رئيس يسيطر على مجلس النواب ومجلس الشيوخ والمحكمة العليا وامتلاكه كل الإمكانيات لتحقيق كل سياساته.

وأضاف السعيدي في مقابلة مع “العربية Business”، أن تخفيض العجز تحت إدارة ترامب سيكون صعبا.

 

 




“Trump redux could bring in the law of unintended consequences”, Op-ed in Arabian Gulf Business Insight (AGBI), 5 Aug 2024

The below opinion piece titled “Trump redux could bring in the law of unintended consequenceswas published in the Arabian Gulf Business Insight (AGBI) on 5th August 2024.

An Arabic version of this article was published by the Middle East Council: click to access the article.

Trump redux could bring in the law of unintended consequences

Gulf states need to expect the unexpected as an ‘America First’ agenda could fragment global trade

One hundred days ahead of elections in November, former US president Donald Trump is polling strongly despite the emergence of Kamala Harris as the Democrat candidate. What would the implications be for us in the Gulf and around the world of a Trump presidency redux?

From public statements and his record in the previous 2017 to 2021 term, we can identify the basic tenets of such a presidency as nationalism, isolationism, protectionism, populism, and a clampdown on migration. In other words: “Maganomics” (after Trump’s slogan, Make America Great Again).

Whether fully or partially adopted, Project 2025, a 900-page blueprint for office by a conservative think tank, offers further clues on the direction of a radical new Trump government.

The policies of such an administration would have an impact around the world, with direct and spillover effects on the Middle East.

In the first place, the trade, fiscal, energy and deregulation policies advocated by Trump, along with a crackdown on immigration, are inflationary in nature.

These could increase US nominal GDP but imply even higher US budget deficits – currently running at 6.7 percent of GDP – and Federal debt, which already exceeds 100 percent of GDP.

A resurgence of inflation would force the US Federal Reserve to keep interest rates higher for longer, delaying any monetary easing. This would boost the dollar at a time when other G7 central banks, including the ECB and the Bank of England, are easing rates.

Higher, longer lasting interest rates and a strong US dollar would affect emerging markets negatively via higher inflation and bigger budget and trade deficits.

Mena countries such as Egypt and Tunisia with high external debt to GDP could be particularly impacted. Higher US interest rates would exacerbate the growing crisis in which global public debt already exceeds $100 trillion, and implies higher servicing burdens.

Macroeconomic risks – sovereign defaults, market failure, unexpected shocks – would grow.

Secondly, Maganomics focuses on protectionism. An “America First” agenda means higher US tariffs. Trump has spoken of imposing higher import tariffs of 10 percent across the board and 60 percent on China, leading to greater fragmentation in global trade and investment.

Anti-dumping measures could affect GCC industrial exports to the US, including steel, aluminium and petrochemicals. 

Conflict with China over trade and tech and de-coupling measures – to say nothing of Taiwan – could slow growth in the former and lower oil and gas imports in the world’s second largest economy.

All these have negative implications for GCC exports and growth. This could be mitigated by China’s growing non-oil linkages with the GCC, which span clean energy, financial integration, tourism and tech.

A ramping up of US-China economic warfare could turn out to be a net positive for the GCC. In an illustration of the “law of unintended consequences”, China could divert trade and investment to the GCC and the Middle East.

Thirdly, energy is a major plank of Maganomics. Short of repealing the Inflation Reduction Act or the Infrastructure Investment and Jobs Act, a Trump administration would pursue aggressive federal deregulation. Its policies would ramp up investment in energy infrastructure and resources. It would also likely remove drilling restrictions in Alaska and the Gulf of Mexico and cut clean energy subsidies.

The objective would be to galvanise the US as a major oil and gas exporter, while Russia is sanctioned and displaced from EU markets. US crude oil exports reached a record in 2023, averaging 4.1 million barrels per day. The US was also the top exporter of LNG globally in 2023, averaging 11.9 billion cubic feet per day.

Deregulation of the oil and gas industry could boost US exports and lower oil prices, providing competition for Opec+ and the GCC.

Fourthly, a new Trump administration might reverse climate commitments – the US is the world’s second-top emitter of greenhouse gases – and reduce spending on climate risk mitigation and adaptation, and climate tech. This implies that temperatures would increase globally beyond 1.5C.

This year saw cities scorched by some of the hottest summers on record. The coming decade is likely to be even hotter. This could however offer an opportunity for GCC to increase its renewable, clean energy and climate tech exports.

The bottom line is that Maganomics means headwinds for the GCC. Regional geopolitical risks would grow, coupled with uncertainty on likely impacts.

To counter, the GCC states individually and collectively should maintain their strategic course. They should increase openness through trade and investment agreements, focus on greater economic diversification and regional integration, pursue green industrial policies and invest in renewable energies and climate tech.




Trumpian Trade Wars threaten the GCC, Article in The National, 26 July 2018

The article titled “Trumpian Trade Wars threaten the GCC” appeared in The National’s print edition on 26th July, 2018 and is posted below. Click here to access the original article.

Trumpian Trade Wars threaten the GCC

We are witnessing the demise of multilateralism and rule-based international cooperation
 
The protectionist stance of the current US administration has been evident since US President Donald Trump took office: the ongoing re-negotiation of the North American Free Trade Agreement (Nafta), non-participation in the Trans-Pacific Partnership (TPP), and the tariff hikes – which began with solar panels and washing machines (in January) to the latest threat of potential additional tariffs on $500 billion worth of Chinese exports.
The nationalism-protectionism of “America First” is coupled with an isolationist view of regional and international agreements on trade, investment, climate, human rights and even defence agreements (Nato). We are witnessing the demise of multilateralism and rule-based international cooperation built since the Second World War.
We have entered the phase of Trumpian Trade Wars, from the imposition of steep tariffs on steel and aluminium in early March this year, to the latest (July 6) announcement of a 25 per cent tariff on about $34bn worth of Chinese goods. China, the EU and others have announced retaliatory tariffs, which does not bode well for global trade. The Financial Times estimates that, should countries retaliate, the value of trade covered by the measures and countermeasures resulting from Mr Trump’s trade policies could reach more than $1 trillion (some 6 per cent of world trade), which would derail global growth and recovery in the EU. The escalating economic tension between the US and Europe, after China has already rattled global stock markets, could lead to a financial crisis given the headwinds of monetary policy tightening and geopolitical turmoil.
Why is the US running large trade deficits? The main answer is that the US has a low level of savings compared to the level of investment. The personal savings rate in the US is running around 3.2 per cent compared to the thrifty Chinese rate of about 35 per cent. The US is spending more than the income it generates, running both a fiscal and a current account deficit, attracting capital inflows and borrowing to finance these deficits. The deficits look set to increase given the US fiscal stimulus package and tax cuts passed in 2017, which encourage consumption and imports at a time when the US economy is overheating.
Tariffs on solar panels, steel and aluminium or cars will raise the cost to US businesses and consumers and disrupt global supply chains. A 25 per cent tariff on all cars and parts would raise US consumer prices by $1,400 to $7,000 for high-end vehicles. For the proposed auto tariffs, nearly 98 per cent of the targeted car and truck imports by value would hit key US allies: the European Union, Canada, Japan, Mexico, and South Korea. Trumpian Trade Wars are not only beggar-thy-neighbour policies, they are beggar-thy-allies.
Cars and phones are prime examples of highly globally integrated industries. Many of the goods that the US imports (such as electrical and electronics) are US designed but manufactured in China, Mexico and other countries with an advantage of lower costs, but relatively low value added in global value chains. The profits, however, are made by US businesses like Apple, Amazon and others. Economists look at “trade value added”, but unscrupulous politicians broadcast headline grabbing total trade numbers.
Although the highlighted US-China trade deficit was at $375bn last year, the US runs trade deficits with 102 nations (not just China) and has run deficits since 1975, averaging $535bn per annum since 2000. The trade deficit on goods was $810bn in 2017 but substantially less at $566bn on goods and services: the US is a major exporter of services and tends to run a large services surplus.
The notion that imposing tariffs on Chinese imports would erase US trade deficits is flawed, absent macroeconomic developments and policies that would change the saving-investment gap. On the other hand, trade retaliation might be costly for export-led China and tit-for-tat tariff hikes between the two largest economies of the world would result in slowing global trade, severe disruption of global supply chains, lower investment, derail economic growth and result in a sharp correction of financial markets.
The announcement of a widening of the scope of tariffs signals that US strategy is shifting away from the protection of local industries (solar, steel) based on “national security” to one based on intellectual property and the acquisition of new tech. The wider, more strategic objective is an attempt to prevent China’s declared ambitions of moving up the activity and trade complexity ladder, with higher value tech goods and services, the “Made in China 2025” horizon.
China is inching closer to developing an edge in AI, blockchain, Big Data, FinTech, life sciences (Crispr) and related technologies. Indeed, the EU might join the US to rein in the emergence of China as a tech frontrunner.
With the US imposing tariffs on a variety of goods, trade will be diverted to other countries. Already, China is buying soya beans from Brazil, shifting from the US. China will shift and develop new markets for its exports, reorienting its trade towards the EU, Asia, and the Middle East, leading to lower prices of affected commodities (which could lead to potential retaliation by the EU and Japan). China has other options: it could retaliate through non-tariff barriers to trade rather than imposition of tariffs; raise informal barriers to US investment in China; diminish the flow of investment in US Treasuries; as well as allow a depreciation of the yuan (justified by lower export and overall growth as a result of US tariffs). We could be entering a phase of currency wars.
The bottom line is that growing US trade protectionism will lead to a shift in global trade patterns and international alliances away from the US and the creation of new trade blocs. Already, the EU and Japan have signed a major trade agreement eliminating most tariffs, covering a market of some 600 million people and a third of the global economy.
China is likely to seek a similar free trade and investment agreement with the EU (which is already China’s most important trade partner) and seek strategic partnerships with Germany and other European countries. It will likely also want to join the Trans Pacific Partnership. China will likely accelerate implementation of its Belt & Road initiative leading to a deeper integration of B&R countries into its economy and its global value chains, opening new markets. China will also accelerate and increase its investments in robotics, AI, Blockchain, Big Data, FinTech, and high tech to bring forward its ambitious “Made in China 2025” strategy. The Chinese dragon will not be contained.
What does all this mean for the GCC? The GCC exported $9.4bn of aluminium in 2017, (of which the UAE provided $5.6bn worth, representing 10.1 per cent of world exports) and is the largest exporter to the US after Canada and Russia. Already adversely affected by aluminium tariffs, the region would be additionally hurt by a decline in world trade and world growth which would lower oil prices, and particularly if China were hard-hit.
The GCC’s total trade with China was close to $110bn last year, with the largest export from the region being crude oil, and accounts for more than two thirds of China’s trade with the Middle East.
Given growing US protectionism, the time is right for the GCC to reorient their international trade agreements and pivot towards Asia, including the long delayed Free Trade Agreement with China.