On Wednesday, President Donald Trump announced a 10 percent baseline tariff on imports from several countries, including the United Arab Emirates (UAE) and Saudi Arabia, as well as a 20 percent tariff on Jordan.

Hamza Dweik, Head of Trading and Pricing at Saxo Bank MENA, indicated that the move would have a "multifaceted" impact on the economies of Gulf Cooperation Council (GCC) countries, suggesting that the tariffs may raise export costs for businesses in the UAE, potentially undermining their competitiveness in the American market.

He noted that businesses reliant on exports to the US might see a decline in volumes and revenues, particularly those sectors not fully diversified from American demand.

Vijay Valecha, Chief Investment Officer at Century Financial, provided a counterpoint, asserting that the impact of the tariffs would be minimal due to the comparatively low volume of bilateral trade between the US and GCC nations.

He highlighted the aluminum industry as the most directly affected sector, mentioning that GCC countries account for 16 percent of US aluminum imports, with the UAE being the second-largest supplier after Canada.

Valecha pointed out that low energy costs in the region could help mitigate some adverse effects and that any aluminum not exported to the US might be redirected to domestic construction and electric vehicle manufacturing projects.

The tariffs announcement triggered immediate market reactions, with US stocks experiencing significant declines and the dollar slipping in value.

The Dow Jones Industrial Average dropped by 1,400 points, or 3.3 percent, while the Nasdaq Composite fell by five percent.

Brent crude oil prices also plummeted by seven percent, reaching $69.71 per barrel.

Multinational companies, including major brands such as Nike and Apple, saw their shares decline sharply.

Market analysts expressed concerns over the potential for a trade war, highlighting uncertainties related to global growth, inflation, and ongoing trade tensions.

DHL, a multinational logistics company, announced they remain optimistic but are closely monitoring the trade situation.

A spokesperson indicated that they need to assess the potential long-term implications for global trade resulting from the evolving tariff landscape.

Several analysts noted that consumers would likely bear the brunt of the tariffs.

Nayeem Aslam, Chief Investment Officer at Zaye Capital, warned that consumers are expected to face higher costs of goods in the wake of the tariffs, stressing that the global markets entered a pessimistic phase.

This has led to historical highs in gold prices and increased costs for various consumer products.

Joseph Dahrieh, managing principal at Tickmill, remarked that the tariffs pose risks for UAE exporters that could strain the trade balance and businesses.

He added that the overall impact might be limited, thanks to robust local economic fundamentals.

Dilin Wu, a research strategist at Pepperstone, pointed out key considerations affecting the UAE's economy related to oil demand and investment flows.

As a significant oil exporter, the UAE's economy is vulnerable to shifts in global energy demand, which might decline if trade tensions slow the global economy.

She also noted that the UAE's economic model relies heavily on its status as a logistics hub and free trade zones, which could be jeopardized if multinational firms restructure their supply chains in response to tariffs, potentially reducing the flow of trade and capital into the region.