US-China trade war brings pros and cons for the Gulf

I shared comments with Valentina Pasquali for AGBI – Arabian Gulf Business Insight on the consequences for the Gulf economies of the heated US-China trade war.

Reminding readers that “The GCC has actively positioned itself as a strategic middle ground between East and West, making its economic ecosystem particularly sensitive to US-China trade dynamics”, I noted that “It has been the GCC’s strength in times of benign US-China trade relations, but could just as easily turn into a factor of fragility in this context of heightened tensions.”

Beyond the impact on local logistics and transshipment business, wholesale & retail as well as trade finance and construction, I added that “A dynamic to watch particularly closely is how this US-China trade war will translate into renewed tensions on the tech front”, as “Gulf tech firms and investors could see their ability to integrate solutions from both sides of the geopolitical divide hampered.”

But there are many reasons to be optimistic about the ability of GCC economies to rebound from this crisis as the grouping “may have an opportunity to balance out risks by strengthening its role as an international trade “nerve centre” as new trade routes develop, and focus even more on serving emerging markets“. I added that “The fact that GCC economies keep entering into new free-trade agreements is an indication that they still believe that resilience and strategic autonomy are best built through diversification of trade partners”.

Read the full article here.

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