Tariff policy may be decided in Washington, but its effects are felt globally and for commercial real estate in the Middle East, the implications could be significant.
With the possibility of a second Trump administration bringing renewed trade barriers, global corporates are revisiting their supply chain strategies. Some of those recalibrations may well land in the UAE.
For investors and developers in industrial and logistics, the shift presents both risks and openings. The UAE’s free zones, already well-positioned as trade hubs, could become attractive nodes for companies looking to mitigate US tariff exposure. That might mean relocating final assembly or light manufacturing processes to the region in hopes of changing the product’s country-of-origin classification under US customs rules.
Such moves would likely increase demand for compliance-ready industrial space; units tailored for bonded storage, value-add processing, and export logistics. Developers with exposure to free zone assets may see a more diverse occupier mix, while mixed-use schemes could benefit from accompanying demand in office, R&D, and workforce accommodation.
The upside, however, is paired with exposure. The UAE’s aluminium exports to the US -valued at over US$1.4 billion annually – will be subject to a widespread 25% tariff under the new policy. While this will create pressure, the country’s comparatively low-cost production base globally will likely cushion the impact and enable the UAE to remain a competitive supplier to the US market. More vulnerable is the UAE’s re-export model: if US enforcement begins targeting transhipment or minimal processing, friction could emerge. That would have knock-on effects for space absorption, rental growth, and leasing confidence across core logistics corridors.
There’s also the broader question of trade volume. If tariffs slow global movement of goods, Dubai and Abu Dhabi - deeply embedded in those flows - could see a moderation in throughput and tenant activity. But in parallel, certain sectors—pharmaceuticals, electronics, luxury goods - may actively seek UAE platforms to navigate tariff risk, particularly if US-bound products can be reclassified.
How much of this plays out depends on several variables: the scope of new US tariffs, the strictness of customs enforcement, and the UAE’s own response. If incentives are sharpened and infrastructure expanded, we may see meaningful relocation activity within one to three years and the formation of new industrial submarkets in five. For real estate investors and corporates, the challenge will be staying ahead of the policy curve. Tariff disruption is not new but in a fragmented global economy, the real estate outcomes could be more enduring than before.
