UAE To Benefit With Re-Exports, More Shipments Amidst US-China Tariff Row

“Dubai's status as a global trade hub could position it to benefit from tariff tensions, particularly through increased transshipment, re-exports, and supply chain diversification. While Southeast Asia and Mexico remain primary destinations for manufacturers relocating production, Dubai offers a strategic alternative for companies focused on high-value trade, logistics, and regional distribution,” said John Donigian, senior director of supply chain strategy at Moody's.

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He added that Dubai's“free zones, world-class infrastructure, and neutrality make it an attractive base for firms looking to mitigate tariff risks by re-routing goods, setting up regional operations, and expanding into the Middle East, Africa, and South Asia.”

John Donigian

Donigian elaborated that Dubai will likely see growth in trade flows, corporate presence, and supply chain activity as companies adapt to a shifting global trade landscape.

In December 2024, China's total exports to the US reached $48.83 billion, up from $47.31 billion in November 2024.

“With tariffs restricting Chinese exports to the US, manufacturers that relied heavily on American demand will now seek alternative markets to sustain operations and maintain production levels.

“This shift is likely to push Chinese manufacturers to lower their prices, as they need to remain competitive and keep their factories running. For UAE importers, this presents a major advantage - they can leverage the situation to squeeze better deals and secure lower costs from suppliers and manufacturers,” said Anis Sajan, vice chairman of Danube Group.

Anis Sajan

Additionally, he noted that Chinese exporters look for new buyers, and the UAE and the broader Middle East emerge as attractive alternatives.

“Due to geopolitical factors, India may not be a viable option, making the UAE a key hub for redirected trade flows. This shift will further strengthen Dubai's position as a global trade centre, creating a buyer's market for local importers.”

Sajan noted that Chinese manufacturers have relocated to Vietnam in the past and they will do the same again.

“China's global competitiveness has largely been driven by its affordable labour costs. There is every possibility that Chinese exporters may relocate to UAE,” he said, adding that if Chinese firms consider moving production to Dubai, they will need to assess a couple of areas like affordable labour to sustain operations; maintain margins and remain competitive.

“It is for sure that Chinese manufacturers will not sit on their heels. To keep the momentum in business, they will go out of the way and ensure the ball is running,” he concluded.

Kunal Lahori, managing director of Palmon Group, said Chinese firms are looking at Dubai and UAE as the US-China tariff war is a good opportunity because Dubai is very well positioned and located.

Kunal Lahori

“Chinese firms can use Dubai for re-exports to avoid taxes. And that is a big benefit for Dubai. All the agreements and CEPAs (Comprehensive Economic Partnership Agreements) that the UAE government is pushing for are going to boost manufacturing here. The UAE leadership's vision is to boost the logistics and manufacturing industry which will create more jobs in e-commerce, logistics and manufacturing. There is a very definite bright future in the next three to four,” added Lahori.