US-China Trade War Can Open New Doors For SMEs In The UAE

By Megha Merani / Entrepreneur ME 


SOURCE: Entrepreneur ME - US-China Trade War Can Open New Doors For SMEs In The UAE

One man’s challenge, another man’s opportunity. Or so they say. In which case, trade wars, while volatile and disrupting, breed opportunities for those who can tap into them instead of getting caught up in the crossfire.

We are, of course, talking about the ongoing trade dispute between two of the world’s largest economies. In what is becoming a common occurrence, the Trump administration in the United States (US) agitated markets when it announced it would impose tariffs on billions of dollars worth of goods from China, igniting an immediate retaliation from Beijing. With each imposing 25% levies on billions of dollars of each other’s goods, the rift has stirred up fears of a long drawn out battle between the US and China, creating ripples across the globe.

But it’s not all bad news. Tesla Inc. and BMW AG, for example, are turning lemons to lemonade by simply bypassing levies. The biggest potential losers from Beijing’s duties on car imports from the US, as much of their production is centered in America, the automakers are instead doubling down in China. Tesla announced its first factory outside the US in Shanghai. And German luxury car maker BMW announced its joint venture with China’s Brilliance, set to become the first foreign manufacturer to own majority control of a Chinese automobile venture.

Closer to home, an Economic Bulletin on the US-China trade war by the Dubai Chamber of Commerce says that the UAE and some other GCC countries are “very well positioned” to gain a larger market share in the Chinese market for select products on the list such as petrochemicals and polymers, such as polyethylene, polycarbonate and acrylonitrile, along with liquefied propane. The tariffs could also have a positive impact on UAE producers due to higher demand from China. Meanwhile, with the UAE’s role as a major transshipment point, the trade war also presents an opportunity for SMEs in the Emirates and wider Middle East region who function as the main importers and re-exporters of Chinese goods.