The reverberations of Trump’s historic election win in November (2024) are still being felt. The international community now examines every public pronouncement from the President-elect both from throughout the campaign and during this transition period to forecast the policy agenda of the incoming US administration.

One key consistent is Trump’s love of tariff threats as a vehicle for his ‘America First’ agenda, and now BRICS (Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE) appears to be in these crosshairs. He relayed a clear threat via the X social media platform 1 December stating that

The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER. We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful [US] Economy. They can go find another “sucker!” There is no chance that the BRICS will replace the [US] Dollar in International Trade, and any Country that tries should wave goodbye to America.

The implications, if realised, are significant. BRICS has established itself as a critical player within this geopolitical framework. The newest members, which includes the UAE, formally joined the bloc effective 1 January 2024 (Saudi Arabia was also invited to join in the same round of invitations but still yet to confirm its acceptance). As a major trade and financial hub, the UAE is deeply connected to global supply chains and is more interwoven within the economic trajectories of BRICS economies. Its economic diversification strategy, particularly its efforts to reduce reliance on oil exports, has deepened its interdependence with China, India, and Russia.

While these relationships position the UAE to benefit from growth in BRICS economies, a second Trump administration’s protectionist policies, including tariff wars as unilateral measures, could disrupt these dynamics and reshape global trade.

China is an important part of this, being the UAE’s largest trading partner and with extensive cooperation in energy, infrastructure, and technology. The Belt and Road Initiative has helped to solidify the UAE’s position as a gateway for Chinese goods and investments flowing into the Middle East and beyond. Aside from any threats regarding BRICS more generally, the President-elect, has not held back on tariff threats regarding China specifically. Any escalation of trade tensions with China could have some indirect impact on the UAE. Increased tariffs imposed on Chinese exports to the US may force China to redirect commodities to other markets, including the Middle East. While this new alignment could open up opportunities in the form of higher trade volumes through the UAE, it also risks straining the Emirates’ logistical bandwidth and entangling it in the sweep of events in US-China relations.

India has a special relationship with the UAE as one of its key economic partners in trade and investments, and the relationship is further strengthened by the growing Indian expatriate workforce in the UAE. If the US under Trump were ever to pressure India to balance its trade surplus with the US and align itself more closely with American strategic interests, it could also adversely affect India’s economic engagement with the UAE. Conversely, these aforementioned heightened tensions between the US and China could work in favour of India, making it a manufacturing alternative and attracting higher foreign direct investment. The UAE, as a financial and trade go-between, could play a crucial role in facilitating this transition.

It is yet to be seen if Trump intends to continue to maintain or intensify sanctions against Russia or chart push for a peace agreement with Ukraine. Either scenario has implications on BRICS and the UAE. Energy cooperation is the cornerstone of UAE-Russia relations, with both countries being major players in OPEC+ and sharing an interest in stabilising global oil markets. Sustained or heightened US sanctions on Russia could impact Russian energy exports and investments in the UAE. Nonetheless, the UAE’s balanced foreign policy could allow it to act as an interlocker in the midst of a sanctions fog. In addition, closer ties between Russia and China may create opportunities for the UAE to serve as a conduit for increased trade and investment between these two BRICS economies.

A second incarnation of Trump’s tariff wars, especially one fixated on BRICS, could be a double-edged sword for the UAE. It runs the risk of exposing the Emirati economy to heightened tariff barriers and increased vulnerability to global economic disruptions. It could also see the UAE’s role as a financial epicentre expand as BRICS explore alternatives to the US Dollar for trade. Its advanced banking infrastructure could facilitate transactions in currencies such as the Chinese Yuan, providing a route around future sanctions and reducing Dollar dependency.

The UAE could also capitalise on shifting global supply chains by investing in more free-trade zones, and digital infrastructure. These resources could be vital for sustaining its growth amidst evolving trade patterns.

The return of Trump presents the potential for turbulence on the world-stage, and as now intertwined with BRICS, this could be felt by the UAE. Nevertheless, given its proactive and adaptable stance, the UAE is well-positioned to address challenges and seize opportunities in a changing geopolitical environment. As tariff wars poises itself to visit the global economy once again, the UAE’s strategic agility to navigate such complexities can ensure its position as an indispensable broker in global commerce and diplomacy.