As Trump’s trade barriers fragment established commerce patterns, Middle Eastern economies canposition themselves as essential connectors

By Pankajj Ghode, CEO, Elmirate

President Trump’s “America First” trade policy has redrawn the global economic map. China now faces 34% tariffs, India contends with 26%, and European allies must navigate 20% levies on their U.S. exports. Global businesses are rapidly adjusting to this new reality, rethinking where they manufacture, how they ship, and which markets deserve priority.

The Middle East stands at the center of this shifting landscape. The immediate economic impact of Trump’s tariffs on Middle Eastern economies is significant. The region exported over $76.24 billion in goods to the U.S. in 2023, with key sectors including mineral fuels, metals, and industrial equipment now facing varying degrees of tariff pressure.

Yet beneath these headline figures lies a more complex reality. The UAE has maintained robust trade with the U.S., with bilateral flows reaching approximately $27 billion in 2024. This relationship has created a $19.5 billion U.S. trade surplus – a fact that may shield the UAE from the most punitive aspects of the new tariff regime.

The real opportunity, however, lies in how Middle Eastern economies position themselves within the disrupted global trade architecture. As manufacturers from China and India search for alternative production bases and export routes, GCC countries offer strategic advantages that few other regions can match.

Evidence of this shift already appears in economic data. Foreign company registrations in UAE free zones rose 22% in 2024 as businesses seek tariff-neutral operations. Manufacturing foreign direct investment across the GCC is growing at 18% annually, outpacing global averages and reflecting the region’s newfound appeal as a production base.

Capturing production shifts

The Middle East’s strategic response to global tariff tensions extends beyond passive accommodation to active industrial development. Dubai’s Jebel Ali Port, which handled over 21.7 million TEUs of cargo in 2023, forms the centerpiece of a logistics network specifically designed to facilitate value-added re-exports. These facilities allow goods from tariff-affected nations to undergo sufficient transformation to qualify as GCC-origin products, essentially creating a sophisticated tariff arbitrage mechanism that benefits local economies.

This capacity comes at a critical moment. World Bank economic projections suggest Middle Eastern countries could capture up to 7% of China’s manufacturing output seeking new homes – representing a potential $31 billion economic boost by 2026. The sectors most likely to relocate include electronics assembly, automotive components, and pharmaceutical production – all areas where GCC countries have made strategic investments.

The financial infrastructure to support this transition exists and continues to expand. Middle Eastern banking institutions have developed specialized trade finance mechanisms specifically designed to manage tariff-related risks. Trade finance volume in Dubai alone is projected to expand by $3.5 billion by 2026, creating the liquidity necessary to fund manufacturing relocation and export growth.

Leveraging eastward relationships

The Middle East’s geographic and diplomatic position between East and West has taken on renewed economic significance. GCC trade with China reached $286.9 billion in 2023, while India-GCC commerce grew to $111.7 billion during the 2022-2023 fiscal year.

These established relationships serve as the foundation for more sophisticated economic arrangements in the tariff-affected landscape. Chinese investments in GCC infrastructure have accelerated, particularly in industrial zones and logistics networks aligned with both China’s Belt and Road Initiative and regional development plans.

India has similarly intensified its economic engagement with the Gulf. The Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE has boosted non-oil trade by 14% since implementation, reaching $50.5 billion in 2023. This agreement creates mechanisms for Indian manufacturers to access U.S. markets via UAE-based value addition and re-export operations.

The Middle East has thus positioned itself as the connective tissue in a fragmented global trade system – offering both China and India partial insulation from U.S. tariff barriers while maintaining its own productive economic relationship with America.

Technology as trade facilitator

The Middle East’s response to trade disruption extends into the digital realm as well. Across the GCC, governments have been investing in advanced customs and trade facilitation technologies, with a particular focus on blockchain applications that can streamline cross-border commerce.

These digital platforms aim to reduce documentation requirements, eliminate redundant verification steps, and accelerate customs clearance processes. For businesses navigating complex tariff regulations, these technological advances offer significant advantages in maintaining supply chain efficiency.

Financial innovation complements these logistics improvements. Banking institutions across the region have developed specialized trade finance products designed to mitigate risks associated with changing tariff structures. Digital payment systems further reduce friction in cross-border transactions, allowing businesses to adapt more quickly to evolving trade conditions.

These technological capabilities strengthen the Middle East’s position as a trade intermediary during this period of global commercial realignment. Digital innovation creates an operational advantage that complements the region’s geographic and infrastructural strengths.

Choosing regional leadership

The U.S. pursuit of protectionist trade policies presents Middle Eastern economies with both immediate challenges and long-term strategic opportunities. The region appears firmly committed to the latter path.

The Middle East has assessed global trade realignments and identified strategic advantages. While other regions scramble to mitigate damage, GCC states are methodically expanding logistics capacity and developing trade corridors with emerging African markets. This calculated approach shifts our position in global commerce from reactive participants to strategic influencers – a necessary evolution given the fragmentation of traditional trade networks.

We’ve transformed our economies before, boldly shifting from petroleum dependence toward diversified, future-ready industries. This moment of global trade reconfiguration presents a similar opportunity for visionary action.

By Omar Mansur, Managing Director – APAC, Codebase Technologies

In an age where digital transformation is moving faster than ever, banks around the Middle East and North Africa (MENA) are forced to confront a growing and increasingly evolving threat: cybercrime and fraud. It’s not just about an increase in the number of incidents; it’s about smarter threats. Nefarious agents are utilizing more complex methods such as leveraging artificial intelligence (AI) to outsmart traditional IT security systems, using everything from deepfake-powered scams to AI-generated phishing campaigns along with social engineering strategies.

In the UAE alone, about 21% of cybersecurity incidents in recent years targeted banks and financial institutions, second only to government entities (Lemos, 2025). With costly breaches on the rise cybersecurity has become a top board-level concern. However globally, 71% of leaders report that small organizations can no longer adequately secure themselves against the growing complexity of cyber risks (WEF, 2025). It’s a high-stakes game and I have personally seen how AI and cybersecurity has taken the spotlight in board meetings and discussion with clients from across the GCC and Levant regions.

This urgency has forced MENA banks to explore AI-driven security solutions that can match the speed and complexity of modern threats, protecting both their customers and their bottom line. The conversation is no longer “if” we need AI-driven defenses—it’s how quickly we can deploy them, and how can we optimize them to adapt to the ever-changing tactics of nefarious agents

Where We Stand

It wasn’t that long ago that Gen AI in banking was mostly used to train and create chatbots for customer support, but this is changing quickly. In the UAE, over 70% of banks have rolled out or upgraded their AI capabilities, and not just to streamline operations, but to actively combat cybercrime (PwC, 2023). Across multiple projects I have seen an overarching focus on AI being incorporated into all manner of digital solutions, particularly in the MENA region where cyber fraud has become a prevalent issue affecting credibility and customer confidence.

The push is being led by both necessity and ambition. Saudi Arabia and the GCC states are investing heavily in national digital strategies, and banks are stepping up with AI systems to detect fraud, verify identities, and stay ahead of financial crime. As many countries in the Middle East position themselves as financial and fintech hubs, ensuring security for customers and institutions is a prime concern in garnering not only customer confidence but regional credibility. That’s pushed regional cybersecurity budgets to grow by double digits, with MENA’s total spend expected to exceed $3.3 billion in 2025, driven by Gen-AI, cloud adoption, talent gaps, and evolving threats (Gartner, 2024).

A True Strategic Advantage or Just a Security Upgrade?

Artificial intelligence isn’t just helping plug holes in defenses, it’s defining the rules for how security is built into every layer of operations. Integrating AI into banking operations gives banks a real edge in regions where speed really matters. Having worked with several banks across the region, I’ve seen firsthand how traditional security models are starting to break under the weight of elaborate AI based threats.

For banks in the MENA region, where rapid digitalization coincides with heightened cyber threats, adopting AI-driven systems enhances operational resilience, reduces financial losses due to fraud, and boosts customer trust. AI not only fortifies security frameworks, it also fosters innovation, empowering banks to confidently pursue new digital business models and expansion opportunities.

AI defenses monitor account activity 24/7 and can react in seconds to anomalies, reducing the window of time attackers can exploit. AI-based user behavior analytics can spot an account takeover attempt at the moment it diverges from normal patterns and automatically disable the account, preventing fraud before it escalates. Early-adopting banks in the UAE report that AI systems have sharply reduced successful fraud incidents and enabled rapid intervention in potential cyber attacks​.

AI isn’t just a nice to have security upgrade, it’s a question of survival.

How are Banks Using AI for Cyber Security

A simple example of successful AI usage in a cybersecurity context is during a next-gen digital onboarding process. With many regulators now strong encouraging or mandating digital onboarding, banks have been able to benefit from using AI-powered systems to prevent fraud before it has a chance to run rampant. Next gen AI-powered onboarding and eKYC minimizes friction for customers looking to open accounts, while providing a secure backend environment to recude the risks for attacks. Such solutions utilize a variety of AI enabled features such as next-gen biometrics, deep ID document validation, Arabic language detection, glare reduction in ID photos, all ensuring a secure authentication and verification of a new customer. An example of this application can be the digital onboarding process implemented by UAE-based Ajman Bank, which has registered a significant reduction in fraud attempts after implementing an AI-based digital onboarding system as part of its digital transformation.

Another strategy for catching instances of fraud is by using AI for anomaly detection. A machine learning model can study what “normal” looks like, in terms of user behavior, transaction patterns, system activity; and flag anything that stands out. This allows banks to see unusual patterns – e.g. a late-night login or peculiar fund transfers, which would evade static rule-based systems. Unsupervised algorithms (like isolation forests or one-class SVMs) and neural network autoencoders sift through vast streams of events to pinpoint such outliers​. Such strategies, can be deployed to facilitate analysis over large numbers of accounts, which can then be flagged to a human for additional intervention and review.

This tactic can work hand in hand with automating routine security tasks with AI, making cybersecurity operations more efficient. This not only addresses the talent shortage by doing more with less, but also lowers costs associated with manual monitoring and investigation. AI-based security solutions have been shown to improve incident response times and cut costs by reducing trivial alerts and speeding up analysis​. Banks in MENA benefit by reallocating human experts to higher-value activities like threat hunting and fortifying security architecture, while letting AI handle the heavy lifting of round-the-clock surveillance.

Neural networks can analyze huge volumes of transactional data, cross-referencing dozens of variables to catch fraud in ways that traditional systems simply can’t. Banks train neural networks on historical transactions to recognize subtle indicators of fraud that humans might miss. An ensemble of decision trees (random forests) or a deep neural network can analyze dozens of features (transaction size, timing, location, device, user profile) to instantly assess whether a transaction is suspicious​. These models adapt as fraud tactics evolve, improving over time. Similarly, neural networks in intrusion detection systems learn to spot network traffic behaviors that resemble known cyberattacks. This leads to faster, more accurate threat detection and frees up human analysts for higher-level decision-making.

Phishing remains a prime concern for many banks as targeting customers can be a much simpler way to compromise a system than to go after the bank itself. In fact, in 2024 there was a sharp increase in phishing and social engineering attacks, with 42% of organizations reporting incidents (WEF, 2025). To mitigate such threats, many cyber security experts are turning to Natural Language Processing or NLP, which has become a dynamic way in recent years that helps banks detect malicious intent in emails, texts, and even chat messages. NLP enables AI to “read” and analyze text for signs of fraud or attack. An NLP-driven system can scan incoming emails to employees and flag phishing attempts based on language patterns and malicious links. Banks use NLP to monitor chat messages and transaction memos for red flags, like someone soliciting account details. By understanding context in language, AI adds an extra layer of defense to catch social engineering and scam attempts that purely numeric data monitoring might overlook.

By deploying these AI-powered strategies in tandem, banks can create a multi-pronged defense system, akin to a digital immune system, ready to tackle a multitude of afflictions. An anomaly detection system might catch unusual account behavior, while an NLP filter flags a related phishing email – together giving a fuller picture of an attack in progress. This intelligent automation amplifies human analysts’ effectiveness, allowing them to focus on verified threats and complex investigations rather than sifting through noise.

Looking Towards a Future of Cyber Resilience

We’re entering a new era in banking security. One where artificial intelligence and generative-AI doesn’t just assist, but actively drives how banks detect, prevent, and respond to threats. The emerging champions won’t be those with the biggest budgets, but those with the clearest strategy, and those who understand that AI is both a weapon and a shield in the modern cybersecurity landscape. One that must be deployed correctly to protect institutions and customers.

When implemented wisely, AI can dramatically boost a bank’s ability to prevent breaches, detect fraud in real time, and operate securely at scale – all essential for maintaining customer trust. At the same time, banks must remain vigilant: as attackers innovate with AI, defensive strategies must keep adapting, and governance must ensure ethical, compliant use of artificial intelligence.

So, here’s a question worth asking at the next board meeting is, are we using AI to its full potential, not just to defend our systems, but to build customer trust, support innovation, and lead the market in resilience?

By Dr. Sunita Mathur, Assistant Professor at Heriot-Watt University Dubai

Entrepreneurship is a challenging yet rewarding endeavor, and financial planning plays a crucial role in determining the success and longevity of any business. The UAE is one of the most attractive destinations for entrepreneurs due to its business-friendly environment, strategic location, and tax advantages. As the Middle East’s startup ecosystem thrives, the UAE continues to cement its status as the region’s leading destination for entrepreneurs. In Q2 2024 alone, the country registered 5,600 new businesses, reflecting its investor-friendly policies, robust infrastructure, and access to capital. However, financial planning is crucial to ensure sustainability and long-term success. Entrepreneurs must navigate various factors, including startup costs, taxation, funding options, and regulatory framework.

The first step in financial planning is choosing the right business structure. Entrepreneurs in the UAE can opt for mainland companies, which allow businesses to operate anywhere in the UAE but require local sponsorship for certain activities. UAE is home to several prominent free zones that attract startups, such as Dubai International Financial Centre (DIFC), which has a total number of 5,523 active companies and Jebel Ali Free Zone (JAFZA), just to name a few. According to Dubai Chamber of Commerce, in the first nine months of 2024, 51,561 new companies joined as members. By the end of the third quarter, ADGM had issued 759 new business licenses. Free zone companies offer 100 per cent foreign ownership, tax benefits, and simplified setup procedures but often have geographical restrictions on trade. Offshore companies are primarily used for international trade, asset protection, and tax optimisation but cannot conduct business within the UAE. Setting up a business involves costs such as trade license fees, visa expenses, and office rentals. Entrepreneurs should budget for these upfront costs and factor in annual renewal fees to avoid disruptions.

Securing adequate funding is another major consideration for entrepreneurs. While self-financing is an option for some, many businesses require external capital to scale. Entrepreneurs in the UAE have several funding options, including bank loans, but these require strong credit history and collateral. Angel investors and venture capital firms provide funding and mentorship through hubs like DIFC FinTech Hive, Hub71, and Sheraa alone, has supported 180 startups with 52% of women startups generating revenue of USD 248M since its inception in 2016. Government grants and programs such as Dubai SME, Khalifa Fund, and Ghadan 21 offer financial support for startups and innovative businesses. Islamic financing options like Murabaha and Ijara provide Sharia-compliant alternatives. Selecting the right funding source depends on the business model, growth stage, and financial goals.

Managing cash flow efficiently is critical for businesses in the UAE, as payment cycles can be lengthy, especially in industries reliant on government contracts or large corporate clients. Entrepreneurs need to maintain a liquidity buffer to cover at least six to twelve months of operational expenses, plan for delayed payments, which are common in some sectors, and open a corporate bank account early, as the process can take several weeks due to compliance checks. By closely monitoring cash flow, businesses can ensure they have enough working capital to sustain operations and invest in growth opportunities.

While the UAE is known for its tax-friendly environment, entrepreneurs must comply with VAT and corporate tax regulations. Businesses with annual revenues exceeding AED 375,000 must register for VAT and file returns quarterly. A corporate tax of 9 per cent introduced in 2023 applies to businesses earning over AED 375,000 in taxable income, with exemptions for Free Zone businesses meeting specific criteria. Entrepreneurs involved in international trade should also consider customs duties and withholding tax obligations. Proper tax planning ensures compliance and avoids penalties.

The UAE is a highly competitive market, and pricing strategies must be carefully developed to ensure profitability. Entrepreneurs should conduct market research to determine competitive pricing, account for currency fluctuations, especially if dealing with international suppliers, and consider operating costs such as rent, salaries, and logistics when setting prices. Regularly reviewing pricing structures can help maintain profit margins while remaining competitive.

Entrepreneurs must also be prepared for potential risks, including economic downturns, regulatory changes, and industry-specific challenges. Key risk management strategies include business insurance, which is mandatory for employees and can safeguard assets; diversification to avoid over-reliance on a single revenue source or market; legal compliance to prevent financial and operational complications; and establishing an emergency fund to cover unforeseen expenses and prevent financial strain during challenging times. As per Dubai SME and other reports, 80 per cent of startups in the UAE fail within the first 2 years, and the key reasons for failure include lack of funding, regulatory challenges and market saturation in certain industries such as e-commerce.

Expanding a business in the UAE requires careful financial planning. Entrepreneurs should leverage the UAE’s strategic location to expand into GCC and MENA markets, explore dual licensing options to operate in both Free Zones and the Mainland, seek government incentives for innovation-driven businesses, and consider forming strategic partnerships to gain market access and reduce costs. Expansion should be backed by financial feasibility studies to ensure sustainable growth.

A well-planned exit strategy is essential for long-term financial success and ensures that entrepreneurs can maximise the value of their business when transitioning out.

Financial planning is a fundamental aspect of entrepreneurial success in the UAE. By carefully considering business setup costs, managing cash flow, securing appropriate funding, staying compliant with tax regulations, and planning for risks and growth, entrepreneurs can build sustainable businesses. With the right financial strategies in place, they can take full advantage of the UAE’s dynamic business environment and achieve long-term success.