Trump’s 90 Day Clock Is Up: Will GCC Become a Safe Bet for Global Investors?

As Trump’s 90 day tariff pause ends, the Gulf Cooperation Council (GCC) nations are emerging as stable, tech-forward investment hubs. Backed by US$1.8 trillion in new US-GCC deals spanning Artificial Intelligence (AI), defense, and energy, this article explores how Gulf economies are absorbing global trade shocks and becoming a safe bet for global investors in 2025.

As the 90-day tariff reprieve initiated by US President Donald Trump on April 9, 2025, expires on July 9, 2025, global trade anxieties have resurfaced. The US tariffs, first imposed on April 2, 2025, range from 10 percent to 50 percent and were designed to reset the global trade playing field. The end of deadline marks a return to Trump’s assertive tariff policies, with levies of up to 25 percent now expected to hit countries without new deals.

Although Trump’s team initially proposed 90 new trade agreements during the pause, by the deadline only a few narrow, sector-specific pacts had materialized. The Trump administration has shifted toward a twin track approach, offering modest agreements on minor issues to a few countries while imposing full-scale tariffs on others.

How tariffs played out in the GCC

The Gulf Cooperation Council’s (GCC) energy exports remain exempted under US new tariff regime, but virtually every other sector, autos, steel, aluminum, pharmaceuticals, has been impacted. Under the 90-day deadline tariff reprieve, Jordan’s tariff rate was reduced from 20 percent to 10 percent, and Israel’s rates from 17 percent to 10 percent. The 10 percent base tariff on imports from Saudi Arabia, the United Arab Emirates (UAE), Egypt, Morocco, and Turkiye remained unchanged.

The new tariffs have caused ripples across the Gulf’s trade and industrial sectors. For aluminum, the impact is direct and quantifiable. The UAE, one of the top three suppliers of aluminum to the US, exported over 347,000 tons in 2024. With the 10 percent tariff in effect, exporters like Emirates Global Aluminum (EGA) and Aluminum Bahrain (ALBA) face squeezed margins, despite their low energy production costs. Due to this, Gulf producers are now turning toward Asian and European markets and focusing on high-margin products like specialty alloys to offset losses.

In petrochemicals, the concern is indirect. The US relies heavily on polymers and refined chemicals from Saudi Arabia and Qatar. But higher raw material costs for US manufacturers could reduce their output, thereby lowering demand for Gulf inputs. To offset this, Saudi firms like SABIC are accelerating downstream expansion to diversify their customer base, particularly in China, India and Southeast Asia.

The pharmaceutical sector, still nascent in the Gulf, faces a slowdown in its US market ambitions. While exports to the US have grown, the new tariffs and political volatility have pushed firms to explore alternative markets like Africa and South Asia. Biopharma firms in Saudi Arabia and the UAE are also increasingly partnering with European players to mitigate this exposure.

Non-oil sectors take center stage in the GCC strategy

GCC countries are not standing still, rather using economic diversification as a strategic cushion against trade uncertainty. The World Bank reports a robust 3.7 percent non-oil growth rate for the region in 2024, with forecasts of 3.4 percent and 3.5 percent for 2025 and 2026, respectively. The IMF projects overall GCC growth to average 3.5 percent in 2025 and 4.2 percent in 2026, outpacing both the global and advanced economy averages.

Bahrain’s Golden License scheme has already attracted US$2.4 billion in Foreign Direct Investment (FDI) and 3,000 new jobs. Dubai and the broader UAE are exploring similar licensing regimes to lure high-value investors. As per World Investment Report of the United Nations Conference on Trade and Development (UNCTAD), UAE received FDI inflows amounting to US$30.6 billion in 2023 alone, compared to US$ 22.7 billion in 2022, to rank second globally in FDI inflows.

On the other hand, countries like Saudi Arabia are pushing ahead with Vision 2030, committing to regulatory reform, foreign investor protection, and sectoral diversification. The development of NEOM, a smart city powered by renewable energy, is emblematic of this transformation.

Read more: NEOM: Understanding Saudi Arabia’s Visionary Project

Friendshoring and geopolitical realignment

In a trade environment characterized by protectionism, the GCC is increasingly benefiting from friendshoring, the shift of supply chains to politically aligned, stable regions. GCC countries’ boast a strategic location between Europe, Asia, and Africa, with direct air and sea routes, making them prime candidates for offshoring.

The India-Middle East-Europe Economic Corridor and finalized bilateral trade agreements (like Bahrain’s FTAs with 25 countries) have the potential to offer preferential market access and help build durable trading relationships of GCC businesses with the global trade partners. The European Union (EU) and UAE have also agreed to launch formal trade talks aiming for a wide agreement covering goods, services, and strategic sectors like energy, tech, and healthcare. This connectivity, combined with a reputation for honoring trade commitments, can boost investor confidence and position the GCC as a global logistics and re-export hub even amidst tariff uncertainty.

Offering free zones and competitive incentives

All six GCC countries offer Special Economic Zones (SEZs) with business-friendly tax regimes and infrastructure support. The UAE boasts 40 multidisciplinary free zones, while Bahrain considers its entire territory a free zone. Saudi Arabia offers a 30-year tax exemption for companies establishing regional headquarters in SEZs, a major pull for multinationals.

These zones are supported by infrastructure-heavy projects, including a 2,000-km GCC railway slated for 2030, and modern ports like Jebel Ali (UAE), Hamad (Qatar), and Khalifa Bin Salman (Bahrain). Such initiatives are attempting to insulate regional supply chains from global disruptions.

Read more: How to Set Up a Company in UAE Free Trade Zones

Human capital and digital transformation

Talent development is central to the GCC’s growth strategy. Residency programs like Bahrain’s Golden Residency, Saudi Arabia’s Green Card, and the UAE’s Golden Visa offer long-term stability for investors and skilled professionals. These initiatives intend to direct efforts toward building a digital-savvy workforce that can make and innovate within GCC.

Saudi Arabia’s partnership with IBM to train 100,000 young citizens in AI and cybersecurity is a proof of this ongoing https://www.weforum.org/stories/2025/02/3-ways-gcc-economies-tackling-the-global-talent-shortage/this pivot. In Bahrain, government-backed Tamkeen supported over 23,000 nationals in 2023 alone with upskilling initiatives. Such policies are designed to future-proof the GCC labor market and attract top-tier global talent.

Focus on energy diversification and green transition

Though exempt from US tariffs, the energy sector is undergoing its own transformation. Abu Dhabi National Oil Company (ADNOC) signed a US$60 billion agreement with US oil majors such as ExxonMobil and Occidental Petroleum. This shows an emerging shift toward joint upstream exploration, with a future lens on green hydrogen and carbon capture.

Similarly, Saudi Arabia’s investments in clean energy, alongside NASA’s agreement with its Space Agency for a CubeSat payload on Artemis II, suggest the GCC’s increasing stake in space and sustainability domains.

A new US-GCC axis: Economic realignment in action

Despite the looming tariff threat, GCC-US trade and investment relations are also performing well. The most striking shift in regional dynamics came during Trump’s official visit to Saudi Arabia, the UAE, and Qatar in May 2025, culminating in over US$1.8 trillion in bilateral agreements. For GCC countries, the deals also advanced longstanding goals of economic diversification, especially in Artificial Intelligence (AI), energy, aerospace, and defense.

Saudi Arabia, for example, committed over US$600 billion, including a record-breaking US$142 billion defense deal, alongside a US$9 billion mining partnership with US-based Burkhan World Investments targeting lithium and cobalt. In AI and data, Humain, a Saudi-backed firm, struck agreements with Nvidia and AMD, while DataVolt committed US$20 billion to build AI data centers in the US.

It is noteworthy that US conglomerates like Google, Salesforce, and Uber too joined forces with Saudi partners for an US$80 billion collaboration in digital services, reflecting the growing synergy between Gulf ambitions and American technological heft.

AI, semiconductors, and a forward-looking UAE

The UAE also pledged an investment of US$1.4 trillion over the next decade focusing heavily on the digital future. UAE and US’s signature initiative is the 5-gigawatt AI campus in Abu Dhabi, spearheaded by local firm G42. The facility is set to become one of the world’s largest AI data centers outside the US. Trump’s reversal of AI chip export restrictions is another pivot undeterred by tariff threat. It unlocked UAE’s ability to import up to 500,000 Nvidia chips annually from 2025 to 2027.

Qatar’s technological leap and aviation milestone

Qatar’s role in the new economic configuration is equally important. The country announced US$243.5 billion in deals, the highlight being a US$96 billion agreement for 210 Boeing aircraft, marking the largest-ever widebody order for Boeing. This deal alone supports 154,000 American jobs annually and over 1 million throughout the contract’s lifecycle.

In quantum computing, a US$1 billion joint venture between Al Rabban Capital and US-based Quantinuum promises to elevate Qatar’s role in advanced computing. QatarEnergy also partnered with McDermott for US$8.5 billion worth of liquefied natural gas (LNG) infrastructure, and in defense, the country secured US$3 billion in drone and counter-drone systems from Raytheon and General Atomics.

Outlook: Will the GCC become a safe bet?

As global investors seek havens in an era of tariffs, friendshoring, and volatility, the GCC stands out for several reasons: policy stability, trade-friendly frameworks, a clear diversification agenda, and an expanding talent pool. The expiration of the US tariff deadline does not spell crisis for the Gulf. Rather, it could accelerate a long-standing transition toward economic self-reliance and regional integration.

From resilient supply chains to transparent legal regimes, GCC economies are positioning themselves not just to survive external shocks but to capitalize on them. In an era defined by shifting alliances and trade uncertainty, the Gulf may indeed become a safe, and smart, bet for global investors.

Read more: Doing Business in UAE Guide 

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