Elon Musk might be getting giddy, but what does Donald Trump reclaiming the presidency in 2025 mean for global manufacturing and businesses in the region? His previous stint at the Oval Office was characterised by an “America First” agenda, marked by aggressive tariffs and a focus on domestic manufacturing. Already we are seeing a reprise of these policies, and there will be opportunities and challenges for businesses. In other words, we need to find the right plan ‘T’.
In his first term, high tariffs on imported raw materials initially benefited US-based producers by encouraging domestic sourcing but also raised production costs across the board. For international machinery manufacturers, particularly those based in Europe and Asia, the tariffs created significant barriers to entering the lucrative US market. And here we are again entering another period of uncertainty for global supply chains.
Trump v1,0 meant higher material costs which in turn led to increased machinery prices globally, with the Middle East being no exception. As a region heavily reliant on imported vehicles and machinery, particularly from Europe and Asia, Middle Eastern fleet owners, contractors and rental companies faced higher procurement costs during Trump’s first presidency.
A similar scenario could be unfolding again, with local companies potentially needing to seek alternative suppliers or delaying fleet investment to manage budgets. This could hinder ongoing growth in countries like Saudi Arabia and the UAE, which are currently in the midst of ambitious development plans.
On the flip side, Trump’s $1tn infrastructure investment plan could offer a silver lining. Rebuilding and modernising US infrastructure (or Greenland’s?!) could drive demand domestically, as well as potentially offset some of the global price hikes. Then again, a private sector spooked by disruption in global markets won’t be willing to pay for it all, as Trump has touted.
“You don’t have need WhatsApp or WeChat to get the message that the tariffs that hurt leaders from Bogota to Berlin are also meant to tempt the leadership in Beijing to strike a bargain”
Publicly the US President claimed he wanted to slap high tariffs on Chinese imports even before he took office. At the time, insiders suggested he would prefer to cut a deal, and that could still be how this high stakes game plays out. You don’t have need WhatsApp or WeChat to get the message that the tariffs designed to hurt leaders from Bogota to Berlin are also meant to tempt the leadership in Beijing to strike a bargain.
The 10% tariffs touted for Chinese exports seems comparatively generous, even.
In any case, the entire trade and pricing of capital assets like equipment and vehicles will be affected, even here. And regionally, we should be cautious about the rise in oil prices – more pros and cons than a Proud Boys golf day there – the tariffs are likely to generate in the short-term.
Protectionist policies increase global prices, challenge supply chains, and slow long-term growth — particularly in regions like the Middle East that depend on imports and a strong global economy.
However, sensible manufacturers will seek out markets that are safe harbours for their products. And the Middle East must use this turbulence to its advantage to get competitively priced vehicles and equipment for its own ambitions. Assuming that the likely trade war that Trump is hellbent on waging is shortened by sense and necessity.
It would be common sense to brace for both volatility and opportunity: strengthen partnerships and finance plans, as well as diversify your supply chains – the diet coke red button isn’t even fully re-installed into the Oval Office yet.
