In April 2025, the global trade environment took another sharp turn as the Trump administration announced sweeping tariffs under a renewed "America First" policy. While these tariffs primarily target imports into the United States, their ripple effects are now being felt globally—including in the Gulf Cooperation Council (GCC) countries, where vehicle re-export is a major economic activity.

This blog explores how the Gulf’s trade with the rest of the world—notably Africa, Central Asia, and Europe—is being reshaped due to these developments.

The Trump administration has imposed a 10% baseline tariff on all imports into the U.S., alongside targeted tariffs up to 60% for certain goods and countries. Most notably for the automotive sector, there’s now a 25% tariff on imported vehicles, even from long-time trade partners like Canada and Mexico.

Although these tariffs are U.S.-focused, they’ve triggered massive global trade diversion—companies and countries are rapidly shifting their sourcing, logistics, and trade routes to avoid the financial burden of U.S. tariffs

Countries like the UAE and Oman act as global re-export hubs—especially for vehicles. Thousands of used and new cars are imported from markets like the U.S., Japan, South Korea, and Europe, then re-exported to:

Africa (Nigeria, Kenya, Ghana)

Central Asia (Kazakhstan, Uzbekistan)

Eastern Europe

South Asia

The Gulf's strategic location, free zones (like Jebel Ali), and light customs regulations make it an ideal transit point. But the new U.S. trade policies are now threatening this ecosystem.

With U.S. vehicle prices increasing due to retaliatory tariffs from other countries and higher input costs from disrupted supply chains, Gulf-based re-exporters are finding U.S. imports less profitable. Many are:

Turning to Japanese and Korean markets as alternative suppliers.

Increasing focus on European used cars, especially EVs, which are not impacted by U.S. trade policy.

The unpredictability of tariffs has created price instability in global vehicle markets. Since re-exporters in Dubai and Sharjah often work on thin margins, sudden cost increases or delays are eating into profits. Buyers in Africa and Central Asia, who are price-sensitive, are reducing orders or looking to buy locally.

Global trade diversion means that shipping lanes and customs systems are under stress, especially in ports now receiving diverted goods. This is causing:

Longer lead times for vehicles moving through the Gulf.

Congestion in Free Zones, with vehicles staying longer in storage, adding to costs.

Other countries—such as Turkey, Georgia, and even Djibouti—are trying to capitalize on the shifting trade routes by positioning themselves as alternative re-export hubs. This poses a competitive threat to the Gulf’s dominance in the re-export supply chain.

While the disruption is challenging, there are also new opportunities for the Gulf:

EV Focus: European and Chinese electric vehicles, largely unaffected by U.S. policy, are gaining traction. The Gulf can become a re-export hub for EVs heading into Africa and Asia.

Diversified Sourcing: Moving away from dependency on U.S. auto imports could lead to more resilient and balanced sourcing strategies.

Aftermarket Boom: As fewer new vehicles move, demand for spare parts and refurbishing is increasing—a sector in which the UAE is already strong.

The Trump administration’s trade tariffs may be aimed at protecting U.S. industries, but their global impact cannot be overstated. The Gulf’s vehicle re-export market—built on fluid, global sourcing and competitive pricing—is being forced to adapt fast.

To stay competitive, re-exporters in the Gulf will need to:

Diversify their supplier base

Embrace digital logistics platforms

Invest in high-demand sectors like EVs and automotive tech

Change is here. But for those willing to adapt, there’s still opportunity in the chaos.