UAE should not take sides in trade war between US and China, says Minister Al Mansouri

The United Arab Emirates Minister of Economy Sultan bin Saeed Al Mansouri reportedly said on Monday, February 11, that the UAE should not take sides between the US and China. He also alerted that the trade war between the world’s top two economies may harm all of us.

On Monday, a team of US negotiators reached China to restart trade talks in order to thrash a deal before March 1. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will join for the main event on Thursday and Friday.

The US President, on the other hand, has postponed the plan to increase 10 per cent tariff to 25 per cent on Chinese imports worth US$200 billion for allowing negotiators some time to thrash out a deal. However, the US and China have already slapped each other with tariffs on products worth more than US$360 billion.

Mark Mathews, managing director and head of Research Asia, Julius Bär, said Americans are actually asking the countries to choose a side in the trade war.

Mathews feels "If push comes to shove, all the countries in Europe and Western democracies will choose the US. Some countries in Africa will pick China. I think the Middle Eastern countries will side with the US based on the historic relations - arms sales, energy purchases etc."

He also pointed out that the Gulf nations will benefit from the trade war and Silk Route as both sides – the US and China – will try to win over the regions.

"Both the side will try to be extra nice with the regional countries. But how these countries respond, that is a tight rope to walk. If you get too close to the US, Chinese will not like that and vice-versa," Matthews told Khaleej Times during an interview.

For the Asian countries, it is a very strange situation as they mostly have trading partnerships with China while on the other hand the US also sells a lot more weapons to them.

In this context, Christine Lagarde, managing director of IMF said although it is not clear yet that how the trade war is going to pan out, it is certain that the trade war will take a toll on trades and markets.

In March 2018, while the US was imposing 25 per cent tariffs on steel and 10 per cent on aluminium products exported from several countries, the UAE was one of those. But Gulf Extrusion's CEO Christian Witsch reported that there was no major impact as most of the exports from the UAE remained focused on European destinations.

Moreover, Sultan Al Mansouri disclosed that the UK had approached the UAE and other Gulf nations on a free trade agreement in post-Brexit.

"We need to have a deeper strategic relationship. It should not only be about selling and buying but about being partners. We are looking forward to addressing common problems and having collective solutions. We are looking forward to having effective partnerships in areas of InfoTech, AI and life sciences as well as making use of UK expertise in education, skills, and vocational training," Mansouri said during the summit.