Dubai Free Zones Set to Benefit from Trump’s Proposed Tariffs as Companies Seek Neutral Ground
Dubai’s free zones could experience a surge in interest from global manufacturers and logistics companies looking to adjust supply chains, as U.S. President Donald Trump proposes new tariffs if re-elected.
Trump plans a 10% base tariff on most imports, with much steeper rates for goods from countries like China (60%), Vietnam (46%), and South Korea (25%). These measures are prompting multinational firms to rethink production strategies.
PP Varghese of Cushman & Wakefield Core highlighted that while U.S. policies are made in Washington, their impact is felt worldwide. He explained that firms may increasingly shift manufacturing and assembly operations to UAE free zones to modify the country of origin and navigate U.S. trade rules.
This shift would likely boost demand for compliant industrial facilities like bonded warehouses, value-added processing centers, and export logistics hubs. Developers offering flexible mixed-use spaces, including R&D, offices, and worker accommodations, stand to benefit.
Dubai’s strategic location, advanced logistics infrastructure, and supportive regulations position it as a leading hub for companies targeting U.S. exports — especially in sectors like electronics, luxury goods, and pharmaceuticals.
However, risks remain. Varghese warned that the UAE’s aluminum exports, worth over $1.4 billion annually to the U.S., would face a 25% tariff under the new policy, potentially challenging the UAE’s re-export-driven trade model.
If U.S. customs start scrutinizing transshipment or minor processing more strictly, it could affect demand for logistics space and dampen rental growth.
Investor Caution Grows Amid Uncertainty
Ayman Youssef of Coldwell Banker noted that although the tariffs haven’t yet directly influenced Dubai’s commercial property prices, they have introduced uncertainty. As a result, many investors are taking a cautious, watch-and-wait approach.
Still, Dubai’s strong fundamentals — prime location, infrastructure, and regulatory framework — continue to attract businesses and investors. Demand for premium office spaces remains strong, driven more by organic growth and relocations than by tariff-related shifts.
In the medium term, growth will depend on how the tariffs are implemented and how regional policies evolve. New industrial hubs may emerge over the next five years if incentives are enhanced.
Youssef added that broader global instability, particularly in Europe, might push more entrepreneurs and professionals to relocate to Dubai, attracted by its stable tax and regulatory environment.
Both experts emphasized the need for careful due diligence during this period. Youssef warned developers against depending solely on client payments and advised maintaining independent project financing and offering flexible payment terms to stay competitive.
Varghese concluded that this era of fragmented global trade could lead to more lasting changes in real estate trends than previous disruptions.
