UAE-US trade relations defy region’s pivot to the east

Archer Aviation

• UAE-China trade worth $107bn
• US exports to UAE $20.8bn
• 1,500 US companies operate in UAE

The trade relationship between the UAE and the US remains strong even while GCC countries increasingly look east for opportunities.

In October 2023, the US trade balance with the UAE stood at $1.63 billion, while US exports grew 28 percent year on year to reach $2.3 billion the same month.

Martina Strong, the US ambassador to the UAE, underscored the UAE’s significance as a market after US companies secured more than $128 billion in deals during last month’s Dubai Airshow, including a $52 billion deal between Emirates Airlines and Boeing.

• UAE and Morocco train sights on further trade with rail deal
• Saudi Arabia and China sign $25bn of deals
• UAE and Australia to hold Cepa talks

Strong added that more than 1,500 US companies operate in the country – double the number of those from China.

Trade between the UAE and China surpassed the Emirates’ combined trade with the US, UK and Western Europe last year, soaring by 37 percent to $107 billion in 2022, according to Asia House.

“Despite its strategic pivot towards Asia, the UAE maintains a strong and mutually beneficial trade relationship with the United States,” says Vijay Valecha, chief investment officer at Century Financial.

According to the Office of the United States Trade Representative, US exports to the UAE in 2022 were $20.8 billion, up 22.2 percent on 2021, while imports from the UAE totalled $6.9 billion, up 10 percent.

Valecha said the US was a significant exporter to the UAE of telephones, cars, aircraft parts, computers and diamonds. 

Last week Khaldoon Al Mubarak, CEO of Abu Dhabi’s second-biggest sovereign wealth fund Mubadala, said it will shift its investment focus towards Asia but added that the US would remain an “unbelievably attractive” market.

Last month officials from Dubai Financial Market held an international investor roadshow in New York. This followed the “Made For Trade Live” tour by Dubai Multi Commodities Centre in Miami and New York.

Dubai Multi-Commodities Centre is home to almost 700 US businesses, including American Express, electronics company Belkin and food producer Cargill. 

GQG Partners, a Florida-based asset management firm with more than $100 billion in assets under management, also announced in late November that it has received in-principle approval to establish an office at Abu Dhabi Global Market. This will be its first investment hub outside the US. 

US companies planning new headquarters in the Emirates include Californian electric vehicle company Faraday Future, Boston water and wastewater solutions “unicorn” Gradiant and air taxi business Archer Aviation.

Balancing relationships

However, it is not all plain sailing. Three UAE companies fell foul of sanctions imposed by the US Treasury for shipping Russian oil sold above the $60 a barrel cap last month.

Earlier this year, Washington also warned the UAE, Oman and Turkey against evading sanctions and export controls imposed on Moscow last year.

“As the US and China vie for influence and economic supremacy globally, the UAE emerges as a crucial hub for both powers,” said Valecha. 

“While the UAE carefully balances its relationships with both powers, its strategic decisions have the potential to reshape the international oil trade landscape and contribute significantly to the broader geopolitical landscape in the Middle East and beyond.”