US-China trade war could make Middle East a dumping ground for cheap imports: Report

A recent analysis by Bloomberg suggests that the escalating US-China trade war could lead to a flood of cheap Chinese goods into Middle Eastern markets, posing a potential challenge to the region's economic development. This influx of affordable products could reshape the competitive landscape and impact local industries.

The United States has previously imposed a blanket 20% tariff on goods from China, as well as tariffs on steel and aluminum products from Mexico, Canada, and the European Union. US leaders have also stated on social media that they will further announce new tariff measures, claiming the move will be America's "Liberation Day." The direct consequence of these tariff policies is that Chinese manufacturers will seek other markets to sell their products, including developing countries and the so-called Global South.

The United States has long complained that cheap and subsidized Chinese manufacturing has stolen jobs from the American middle class. Now, countries like Turkey and Saudi Arabia, which are also striving to develop their own manufacturing industries, may face similar problems. Turkey is trying to position itself as a manufacturing hub for Europe, but may face a flood of cheaper Chinese imports. Data shows that between 2017 and 2023, China's exports to Turkey surged from $23.8 billion to $45.1 billion.

Saudi Arabia is also trying to position itself as a manufacturing center by leveraging its cheap energy prices, but faces the same problem of surging Chinese imports. Between 2017 and 2023, China's exports to the oil-rich Gulf state grew by 9.6%, while exports from the rest of the world to Saudi Arabia grew by only 4.3%. While Saudi Arabia may be able to absorb a large influx of Chinese goods, some poorer Arab countries may find it difficult to cope. Morocco has positioned itself as an automotive manufacturing hub for sales to Europe, while Egyptian manufacturers, already hit by a currency crisis, may be the most vulnerable.

Saudi Arabia, the United Arab Emirates, and Turkey have all witnessed a surge in imports of Chinese machinery, electrical, and electronic products. The two Gulf states have also seen a surge in Chinese car imports. Saudi Arabia has become a buyer of Chinese electric vehicles, and the Saudi government has signed a $5.6 billion deal with Chinese automaker Human Horizons to cooperate on production. At the same time, Saudi Arabia is also partnering with US luxury electric vehicle maker Lucid to produce 300,000 cars per year for export, including to China. If the Middle East is flooded with cheap Chinese goods, these countries may have to emulate America's trade protectionist tactics to protect their emerging markets.