UAE Residents Brace for Ripple Effects of Trump Tariffs Amid Global Economic Uncertainty

As US President Donald Trump’s sweeping tariffs trigger waves across global markets, residents and businesses in the UAE are increasingly bracing for indirect economic repercussions—despite being miles away from Washington or Beijing.
Rutuja Marfatia, a UAE-based small business owner, voices a sentiment shared by many: uncertainty. “Even if the impact isn’t immediate, costs could eventually trickle down through interconnected supply chains,” she says, adding that she’s keeping a close watch before altering her spending habits.
The global economic landscape shifted dramatically after Trump’s April 2 announcement of a “baseline tariff” of 10 per cent on several countries, including the UAE. While vital Gulf exports like oil and gas remain exempt, the knock-on effects are beginning to surface across industries and consumer markets.
Shockwaves in Global and Local Markets
The fallout has already rattled investors. Dubai-based stock investor Zeeshan Masud saw his tech-heavy US portfolio plunge as AI and chip stocks—like Nvidia—lost substantial value. Despite a 30% dip in some holdings, Masud remains optimistic about long-term recovery. “Volatility is expected, but the fundamentals of these companies remain strong,” he says.
For Blair Hoover, a US expat in Abu Dhabi, the real concern isn’t the short-term drop in her portfolio—it’s the potential for a full-blown recession. “The US is isolating itself, and if the economy tanks, it won’t go down alone. The whole world could follow,” she warns.
Interest Rates and Economic Guesswork
Trump’s call for an interest rate cut was met with caution from Federal Reserve Chairman Jerome Powell, who pointed out the inflationary risks of these tariffs. Praveena Yadav, a senior mortgage consultant in Dubai, says markets are divided—some predict rate cuts, others brace for hikes due to inflation. For now, she sees no major shifts in mortgage rates unless the Fed takes drastic action.
Real Estate and Construction: A Mixed Forecast
The UAE’s real estate sector may remain stable for now, but Ben Crompton, managing partner at Crompton Partners, outlines two long-term scenarios. Tariffs could either increase construction costs if US-sourced materials become pricier, or they could fall if the UAE becomes an alternative market for oversupplied goods like steel or aluminum.
Consumer Goods: The Real Hit
Tariff impacts may soon show up on everyday receipts. UAE resident Sonal Chhiber, who works in corporate communications, expects higher prices on electronics, appliances, and digital subscriptions. “If software companies pass down rising operational costs, that will directly impact consumers like me who rely on cloud services and analytics tools,” she explains.
Property consultant Eyal Ashur predicts immediate price hikes in complex US-made goods such as iPhones, laptops, and even high-end cars. Over time, this could extend to airfares and medical treatments, he says.
A Global Tug of War with Local Impact
Hoover highlights a graver concern—supply chain strain. A specific US-sourced medication she relies on could become hard to obtain. “I’m already stocking up,” she says. “Businesses in the US will suffer from reduced demand and higher costs, and that will ripple through to consumers worldwide.”
Dollar Decline and Regional Shifts
The US dollar has dropped nearly 3% this year. With Gulf currencies pegged to it, that weakens the global purchasing power of UAE residents. Keren Bobker, a financial expert at Holborn Assets, believes this could prompt a shift in consumer behavior. “People will start scrutinizing labels more, preferring regional products over American ones—both out of necessity and protest,” she says.
While the UAE remains relatively insulated for now, the mood is cautious. From tech investors to real estate experts, from consumers to consultants, the consensus is clear: a wait-and-watch approach prevails—but everyone knows the ripple effects could soon become a wave.