UAE implements anti-dumping measures as Chinese goods flood local markets

The UAE has implemented anti-dumping measures against Chinese goods over the past week as the country confronts a surge of products being redirected to local markets following US and European tariff barriers, the Minister of Foreign Trade has revealed.

Speaking at the World Economic Forum’s Annual Meetings during a session titled ‘Taming Trade’, Dr Thani Al Zeyoudi, UAE Minister of Foreign Trade, said the UAE is taking protective action while maintaining its commitment to being an open economy.

“For us, the UAE, we’re going to continue being open, but we started the measures on the seals in the last one week, especially since we’re seeing huge dumping coming from China to our local markets,” Al Zeyoudi stated.

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The minister explained that as Chinese commodities face barriers in US and EU markets, they are being redirected to other countries, creating dumping pressures that threaten local industries. The UAE must protect its industries, he emphasised, “otherwise we’re going to compensate something against the other”.

10% US tariff baseline to stay

In a stark assessment of the global trade landscape, Al Zeyoudi delivered what he called “the new reality” that businesses and governments must accept: the 10 per cent US tariff baseline will remain in place for at least the next three years.

“The 10 per cent will not go down. So we have to live with that,” the minister declared, adding that this assessment is based on direct discussions with the US administration. “I don’t think, and even with the discussion with the administration, at least for the upcoming three years, we will see a reduction below the 10 per cent.”

How tariff crisis spiralled

Al Zeyoudi provided rare insight into how the current tariff situation escalated far beyond what the US administration initially intended, pointing to two unexpected dynamics that “messed up the whole plan”.

The first was extreme reactions from countries like China. Everyone expected tariffs to be limited to certain countries and sectors, but the extreme reactions from China and others escalated tensions even within the US administration itself, which “was not expected as well by the administration itself”.

The second dynamic proved equally disruptive: extreme acceptance by countries like Vietnam and other Asian nations opened up opportunities for the US administration to continue demanding more. “Because the minute that happens with Vietnam and then with some other Asian countries, encourage them to continue by saying the countries are going now to accept our conditions on this.”

Unpredictability — the real business killer

While tariffs themselves pose challenges, the Minister identified a more fundamental problem crippling business planning: unpredictability.

“The main issue for the businesses is the unpredictability, because this continuous changes that no one can stick to a business plan, no one can have a long-term plan, and they have to keep changing their tactics on almost a weekly or sometimes daily basis,” Al Zeyoudi said.

UAE’s trade offensive

Against this turbulent backdrop, the UAE has executed an aggressive trade diversification strategy that has yielded remarkable results. Al Zeyoudi revealed that the country has concluded 32 Strategic Investment Partnership Agreements (SIPA) in less than four years, a push that began even before the Covid-19 pandemic.

“Even before Covid, we knew that diversity was going to come. So we started diversifying our investments. We started diversifying our trade,” he said.

This foresight has positioned the UAE to weather the current crisis better than many other nations, with a broad network of trade partnerships spanning multiple continents and economic blocs.

Crisis unlocks stalled negotiations

The global trade crisis has had an unexpected silver lining for the UAE,it has accelerated negotiations that were previously moving at a glacial pace or not moving at all. Al Zeyoudi said the crisis has “sprung countries into action.”

Mexico, which had been unresponsive to UAE requests for a free trade agreement, is now moving quickly. The Minister noted that Mercosur was “very difficult in negotiation” but is now “moving much faster.”

Canada represents an even more dramatic turnaround. Protection of investment agreements that were negotiated for years were concluded within a month after communications reopened.

The European Union is also now negotiating with the UAE at an accelerated pace, moving at “a very good pace,” the Minister said.

Trade flows like water around barriers

Despite the challenges, Al Zeyoudi expressed confidence in trade’s inherent resilience, using a powerful metaphor to describe how commerce adapts to obstacles.

“At the end of the day, the trade is like a water stream. You know for sure the water stream is going to find its way. But with this barrier that comes the way, it’s going to turn over around it,” he said.

However, he cautioned against abandoning traditional trading relationships in the rush to find new routes, warning that countries must maintain existing supply chains and markets while ensuring diversity.

WTO weakened

The Minister offered a nuanced assessment of the World Trade Organisation’s current state, acknowledging its diminished power while defending its continued relevance.

While big economies are walking away from WTO rules, mid-sized and small economies are still sticking to the rule-based system “because it’s the only system which brings everyone on board,” Al Zeyoudi explained. This has created new trade dynamics, with supply chain movements shifting from south-south, mid-to-small, and small-to-mid economies.

“As the rule-based system is collapsing, it’s not collapsing, it’s reducing its historical power, but it’s still there because it brings the majority of countries,” the Minister said.

When asked whether a country can remain open while protecting certain sectors, Al Zeyoudi confirmed that this selective approach is becoming the global standard, particularly for mid and low economies. Countries will examine impacts “country by country” and focus on “certain commodities, not even sectorials.”

AI only solution to trade turbulence

In perhaps his most sobering assessment, Al Zeyoudi declared that the world was unprepared for the current trade crisis and that artificial intelligence represents the only viable solution.

“The world was not ready for such huge turbulence when it comes to trade tariffs, et cetera. And that’s why there’s no alternate system which can be an alternate or a solution for many of the solutions, many of the issues that we’re facing,” he said.

“Now, the only thing which everyone is capitalising on is AI and the technology evolvements that they’re trying to catch up so they can reduce the consequences of the tariffs and the policies.”

The Minister emphasized that trade technology solutions already exist through initiatives started with the World Economic Forum three years ago— they simply need to be implemented. “The technology is already there. The innovation is available. We just need to go and look for them that suits our own interests.”

Private sector leading AI adoption

Al Zeyoudi credited the private sector with leading the charge in using technology to navigate the tariff crisis, particularly in controlling inflation caused by tariffs. He acknowledged that governments are moving more slowly, which is why the UAE government is working to ensure AI is applied to policy analysis and decision-making processes.

The Minister outlined how artificial intelligence is transforming global supply chains, addressing longstanding inefficiencies in the movement of goods from extraction to consumer. While massive data already exists in supply chains, many sectors are not utilizing it effectively, particularly in logistics where documentation creates an “unbelievable hassle.”

“So AI is going to play a major role in reducing that timeline and ensuring the efficiencies of movements of commodities from A to Z,” Al Zeyoudi said.

The Covid-19 pandemic and current trade disruptions have accelerated this transformation, with big logistics companies forced to move quickly and now “moving even much quicker” with the current disturbance.

The Minister revealed how sophisticated multinational companies are using AI and data analytics to navigate the tariff landscape through brand innovation. Companies are identifying countries with favorable tariffs, establishing presence there, and creating new brands to maneuver around challenges.

“The businesses, they’re changing the brands and they’re coming up with new brands. Even if they have the large ones, they’re building new brands so they can manoeuvre around the challenges. And how they’re doing it, they’re doing it by using the analytics of the different data that they have.”

However, the UAE is carefully managing re-export issues to ensure it does not become a conduit for tariff evasion that would harm domestic traders and manufacturers.

Ruqayya Al Qaydi

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Ruqayya Alqaydi is a Special Correspondent with an endless curiosity to learn. Like a journalist on a caffeine overdrive, she is fuelled by passion and on a mission to uncover every gem in the UAE.