UAE Car Market Braces for Impact of US Tariffs Amid Global Supply Shakeup

The move, which targets foreign-made vehicles and crucial components like engines and transmissions, could result in widespread price hikes, particularly for cars built in or dependent on manufacturing from the United States

Car buyers in the UAE may soon feel the ripple effects of new tariffs imposed by US President Donald Trump, experts warn. The 25 per cent tariffs announced on all vehicles and car parts shipped to the US are set to be implemented by May 3, potentially shaking global automotive supply chains and influencing prices in the Gulf region.

The move, which targets foreign-made vehicles and crucial components like engines and transmissions, could result in widespread price hikes, particularly for cars built in or dependent on manufacturing from the United States.

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“This will fuel a price increase not just in the UAE but across the world,” said Shah Bashrat, a veteran automotive expert with over 30 years of industry experience. “Many top car manufacturers have plants in the US and these new tariffs will impact them.”

Former Ford CEO Mark Fields echoed this sentiment in an interview with CNN, saying the tariffs will make every single vehicle more expensive.

For Ifthikar Aly, Founder and MD of Kandy Cars, a UAE-based importer of second-hand American muscle cars, the increase is inevitable.

“The vehicles we specialise in will likely see price hikes in the coming months,” he said. “Even American-spec vehicles from brands like Lexus, BMW, and Mercedes may see price increases between 10 to 15 per cent due to their reliance on US-based manufacturing or parts.”

However, not all experts foresee gloom. Rahul Singh, Managing Director of the Car Rental Division at Dollar and Thrifty UAE, sees potential benefits for UAE consumers.

“Unlike the US, where tariffs will directly drive up costs, the UAE could witness stable or even lower car prices,” Singh said. “Global manufacturers unable to sell to the US may redirect their inventory to regions like the GCC, creating an oversupply and possibly reducing prices here.”

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He added that this scenario could bring more vehicle choices, attractive deals, and greater availability in the UAE — though he cautioned that the volatile global economy means predictions could shift rapidly.

According to Abhinav Gupta, CEO of CARS24 in the Gulf region, the next few months will be crucial for the industry. “The GCC market will likely remain stable for consumers in the short term,” he said. “However, there may be disruptions in the flow of new models and spare parts, especially those sourced from affected countries.”

Gupta also highlighted potential gains for Asian automakers. “The tariffs open up opportunities for cars made in Asia, particularly China, which are competitively priced and increasingly efficient,” he said.

The overall consensus among experts is that the next six months will be a period of transition as global automakers realign supply chains, reassess production strategies, and adapt to the changing landscape of international trade.

“Middle Eastern countries are actively engaging in trade negotiations while global manufacturing hubs like China and Japan face production slowdowns,” Singh noted. “The entire automotive sector is entering a period of realignment, and the UAE will be an important player in that shift.”

For now, UAE residents considering a car purchase may find it wise to act sooner rather than later, as uncertainty looms over what lies ahead.

This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members

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