While there is always a degree of uncertainty when a new American president takes office, there are some things that feel fairly certain when it comes to Donald Trump’s second term in the White House. He has always been mostly transactional in his approach to international relations, and he is at heart a deal-maker rather than a subscriber to any particular ideology. At first glance, it seems Gulf leaders are welcoming a return to this approach – a number have already visited Trump in Florida or spoken to him on the phone.
But the world has changed since Trump was last in power, and questions arise now regarding what his presidency will mean for our region. Much has been written about the geopolitical implications and what a second Trump term will mean for the oil industry, but in this article, I want to look at something else. I want to examine how all that might trickle down and what a Trump administration will mean in real terms for the entrepreneur, the startup, and the small business in the UAE and wider GCC.
Will it be business as usual, or will there be new challenges and opportunities on the horizon? Let’s start with looking at the situation from a high level, to try to get the overall lay of the land.
Business impact of renewed US-GCC relations
There is no doubt that President Trump’s first term in office reshaped US-Gulf relations. His approach to cultivating personal bonds and his policy of non-interference in the domestic affairs of GCC countries was fairly typical of Republican administrations, and the focus on shared strategic interests without pressuring Gulf states on internal reforms will likely continue.
One of the most promising indicators we might take for the future of US-GCC relations was President Trump’s decision to make Saudi Arabia his first foreign visit destination back in 2017. The meeting went beyond symbolism, resulting in significant defence and economic agreements. It underscored the administration’s commitment to strengthening partnerships with the GCC states, a trend that should continue in the second term. The hope is that Trump’s business-friendly approach and focus on reducing regulatory barriers could encourage more American companies to invest in the UAE and GCC.
Challenges when navigating a new American president
Change always brings a degree of risk. In Trump’s first term, there was a significant turnover in his administration and abrupt shifts in policy direction, but I believe this second term is more likely to offer more consistent decision-making, providing Gulf states with greater predictability. In short, he’s done this before, and he knows who he needs to hire to fill out his administration.
However, Trump’s agenda to boost US oil and gas production, as well as his more protectionist ‘America first’ policies, are certainly a cause for concern. Given the GCC’s reliance on hydrocarbon revenues, such a scenario could result in decreased public spending on infrastructure and development projects, which are vital for creating opportunities for small businesses and entrepreneurs. So, that is one key area for the SME owner to watch.
While nothing is certain at this stage, we should also note that Trump’s approach to tariffs has the potential to introduce volatility and reduce the competitiveness of GCC products in the American market, possibly affecting our region’s export-driven economies. Even though the UAE and other Gulf states have diversified their trade partnerships, particularly with Asia, a contraction in global trade could indirectly influence regional economic stability, thereby affecting the business environment for small enterprises.
Finding common ground
So, one hopes that President Trump’s pro-business approach will mesh with the GCC’s focus on boosting economic growth. With that in mind, let’s look at some potential opportunities for SMEs in our region:
- Increased investment and collaboration: Trump’s emphasis on deregulation and international trade aligns with the GCC’s efforts to attract foreign investment and diversify their economies. This could lead to partnerships and funding opportunities for GCC-based SMEs, particularly in sectors like technology, manufacturing, and services.
- Access to US markets: As Trump advocates for strengthening trade ties, GCC SMEs could benefit from easier access to the US market. This provides opportunities for SMEs to expand internationally, offering products and services to a larger consumer base while leveraging business-friendly policies.
- Energy and innovation: Trump’s support for energy industries aligns with the GCC’s investment in energy innovation. SMEs specialising in renewable energy, sustainable technologies, or supply chain services could find new opportunities to collaborate with larger firms in both regions.
- Reduced barriers: The shared focus on cutting bureaucracy and streamlining processes could simplify international trade and investment for SMEs. GCC businesses could take advantage of these policies to scale operations and attract partnerships.
By aligning with these pro-business policies, GCC SMEs may be able to position themselves for growth, leveraging new markets, funding opportunities, and collaboration to thrive in an increasingly competitive global economy.
A shared vision in Bitcoin
The UAE has emerged as a global leader in embracing Bitcoin and blockchain technology, positioning itself as a hub for cryptocurrency innovation. With progressive regulations and a forward-thinking approach, the UAE has attracted major crypto exchanges, blockchain firms, and fintech startups. It really was ahead of the game on this, and while President Trump was initially sceptical, there has been a notable turnaround in his thinking. It didn’t go unnoticed that his son, Eric Trump, gave the keynote address at Bitcoin MENA this year, held in Abu Dhabi.
Clearly, this will be a focus for the new Trump administration and has the potential to benefit small businesses, whether that’s e-commerce stores and brick-and-mortar retailers that accept Bitcoin payments, or blockchain development firms, digital wallet providers, and IT security businesses – all of them stand to gain from the growing demand.
The global appeal of the UAE’s free zones
There are plenty of iconic aspects to the UAE, but perhaps none more so than the country’s free zones. They underpin the UAE’s status as a global hub for business, which attracts international corporations with tax incentives and streamlined regulatory environments. Trump’s preference for lower corporate taxes and deregulation could align with the UAE’s efforts to position itself as a magnet for US businesses seeking a base for regional operations.
The UAE’s strategic location as a gateway between East and West makes it an attractive partner for American businesses looking to expand into Africa and Asia, particularly under a US administration focused on boosting trade competitiveness. Sectors such as logistics, technology, and financial services stand to benefit significantly.
The next four years…
Donald Trump’s return to the White House is likely to bring significant changes to the economic and business landscape of the GCC, with the UAE well-positioned to navigate these challenges. Focusing on energy partnerships, trade agreements, and defence spending could underpin and reinforce the UAE’s role as a strategic ally to the US, creating a trickle-down effect on businesses of all sizes and industries. However, the region must remain agile in addressing the risks of geopolitical volatility and shifting global priorities.
Ultimately, the UAE must leverage its adaptability and strategic positioning to ensure it can capitalise on the opportunities presented by Donald Trump’s second term.