As the U.S. sharpens its trade stance under Trump’s renewed tariff policy, ripples are already being felt beyond American shores. With new duties on Chinese imports, global steel flows are shifting—and the Gulf’s construction ecosystem may be standing at the crossroads of opportunity and upheaval
WORDS BY: VIBHA MEHTA
Rising imports, shrinking margins: Can the GCC construction sector withstand the wave of redirected steel and global competition?
In an increasingly connected world, a policy shift in Washington doesn’t just echo across Capitol Hill—it reverberates down to the skyscrapers rising in Riyadh, the megaprojects shaping Neom and the shimmering towers of Dubai. With former U.S. President Donald Trump back in the spotlight and vowing to revive and expand sweeping tariffs on Chinese goods—including steel and aluminium—the Gulf construction sector braces for impact.
The 2024 policy revival includes up to 60% duties on a range of Chinese imports, prompting exporters to reroute excess materials—especially steel—into more welcoming markets. Among the top destinations? The Gulf Cooperation Council (GCC) countries, where multibillion-dollar urban developments, infrastructure upgrades, and Vision 2030 projects fuel insatiable demand for construction materials.
This redirection of trade brings both opportunity and alarm. Developers and contractors in the Gulf may welcome lower-cost materials—at least in the short term. Yet for local manufacturers such as EMSTEEL (UAE), Rajhi Steel (KSA), and Qatar Steel, the influx of cheaper Asian alternatives could threaten margins, market share, and the viability of large-scale domestic production.
As the GCC pivots toward economic diversification, construction is one of its most vital engines. From the NEOM mountain city of Trojena to the Red Sea Project, Diriyah Gate, and Dubai’s booming urban housing market, the region’s appetite for steel, cement, copper, and aluminium is colossal. Companies like ALEC Engineering, Khansaheb, and Dar Al Arkan are undertaking landmark builds—projects reliant on steady, predictable supply chains.
However, with Chinese steel now redirected to flood non-tariffed markets, GCC suppliers could face an uphill battle. Rajhi Steel, for instance, has already begun reviewing its pricing strategies to stay competitive against the surging wave of imported low-cost billets and long steel products.
For real estate developers like DAMAC Properties, Azizi Developments, and Retal Urban Development, these shifts pose a mix of cost-saving prospects and logistical risks. While prices for imported materials may dip, ensuring quality, meeting project deadlines, and managing fluctuating exchange rates complicates procurement. Meanwhile, local logistics firms such as Agility Logistics and Bahri Shipping are re-evaluating port congestion forecasts, warehousing needs, and cross-border customs bottlenecks.
Furthermore, the knock-on effect on smaller players—particularly in MEP (Mechanical, Electrical, and Plumbing) and façade installation—can’t be overlooked. Companies like ALEMCO, BK Gulf, and Voltas face tighter procurement windows and more aggressive contract negotiations as competition heightens across the supply chain. Margins are thin, timelines stretch, and quality assurance becomes more critical than ever.
From a regulatory lens, Gulf governments may soon be forced to weigh the benefits of competitive pricing against long-term industrial security. For instance, Saudi Arabia’s National Industrial Development and Logistics Program (NIDLP) aims to strengthen domestic manufacturing. However, an unchecked influx of low-cost materials could undercut those objectives unless countermeasures—such as anti-dumping duties or procurement quotas—are introduced.
Sustainability is another overlooked casualty. The UAE’s Green Building regulations and Saudi Arabia’s drive for Net Zero by 2060 rely on vetted, energy-efficient materials. Imports lacking Environmental Product Declarations (EPDs) or sustainability certifications could undermine these efforts. This puts pressure on firms like Wilo Middle East and ABB to double down on transparency across their MEP supply chains and ensure green procurement standards remain intact.
Moreover, contractor-client dynamics are shifting. In high-stakes developments like The Line in NEOM or the new Abu Dhabi Midfield Terminal, cost savings from cheaper materials may appeal to developers. Yet, risks in quality or delays due to customs issues can derail timelines and elevate liabilities. Companies like Turner & Townsend and Hill International are seeing a spike in risk advisory and cost control engagements as stakeholders seek to navigate the turbulence.
Construction tech firms—such as Trimble, PlanRadar, and Procore—are also stepping up, offering data-driven procurement tracking and material forecasting tools that help companies pivot more nimbly. Digital twin technology and AI-based risk simulations are gaining traction to offset the unpredictability caused by fluctuating global tariffs and shifting trade routes.
Yet, amid all this disruption, a silver lining gleams. For Gulf-based steel producers, this could be a wake-up call to innovate. Emirates Steel has already begun investing in hydrogen-powered furnaces to reduce emissions and enhance product differentiation. If local producers can blend sustainability with competitive pricing and leaner operations, they may turn adversity into an advantage.
Even port authorities and logistics parks—like Jafza in Dubai or King Abdullah Port in Saudi Arabia—are preparing for increased freight volumes. Customs agencies are trialling AI inspection systems and digitized clearance pathways to streamline the deluge of incoming goods.
The real question, however, lies in timing. Can regional stakeholders—from policymakers to project managers—adapt quickly enough to weather the shifting tides of global trade? Or will the Gulf’s construction boom be tempered by the weight of an oversupplied steel market?
At its core, this isn’t just about steel. It’s a story of supply chains, sustainability, and strategic foresight. It’s about how a seemingly distant policy decision in Washington can ripple into Riyadh’s skyline or echo through Dubai’s innovation districts.
In a world where geopolitics is the new blueprint, Gulf construction isn’t just building cities—it’s building resilience. And that will be the accurate measure of success in a post-tariff era.
