Trump’s visit unleashes $2.8t in deals, redefines GCC-US economic ties

Vijay Valecha, MSN, May 18, 2025

US President Donald Trump’s whirlwind tour of the GCC nations last week has unlocked a transformative wave of economic and investment opportunities, reshaping the US strategic partnership with the UAE and other Gulf states.

With over $2.8 trillion in deals spanning artificial intelligence (AI), aviation, defence, and energy, the visit has not only deepened bilateral trade ties but also positioned the UAE, Saudi Arabia and Qatar as global hubs for innovation and investment.

The implications of these agreements are far-reaching, opening new opportunities, risks, and the broader economic impact for investors and policymakers alike. For the UAE, an emerging global economic powerhouse, the ripple effects of these deals will shape markets and investment strategies for years to come.

According to analysts, for Gulf economies, which have been looking to reimagine their ties with the US as they seek to shift away from a transactional oil-for-security understanding to stronger partnerships that are rooted in bilateral investments, the Trump tour has helped set the perfect stage.

With nearly 13,000 American companies operating in the UAE and over 66,000 US trademarks registered by the end of 2024, the economic ties are robust. Conversely, more than 115 Emirati firms are active in the US across sectors such as healthcare, technology, and aviation, underscoring the reciprocal nature of this relationship.

Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, emphasised the US as the UAE’s largest non-Asian trading partner, with non-oil trade reaching $32.8 billion in 2024, accounting for 4 per cent of the UAE’s global non-oil trade. “Our shared commitment to prosperity drives efforts to enhance the flow of goods, services, and capital,” Al Zeyoudi noted.

The visit has catalysed new frameworks, such as the US-UAE AI Acceleration Partnership, aimed at advancing collaboration in AI, cloud infrastructure, and advanced computing.

Trump’s tour has unlocked unprecedented investment opportunities across multiple sectors, with US companies at the forefront of the Gulf’s modernisation and diversification ambitions.

The Gulf is emerging as a global AI and cloud computing hub, with initiatives like the Abu Dhabi data centre—set to be the largest of its kind outside the US—led by G42, a UAE-based AI firm backed by Mubadala and Silver Lake. A draft US-UAE agreement could see up to 500,000 Nvidia AI chips imported annually from 2025, with 100,000 allocated to G42 and the remainder to US tech giants like Microsoft and Oracle for data centre expansion. This deal, potentially extending to 2030, requires G42 to build equivalent facilities in the US, ensuring mutual benefits.

Chipmakers (Nvidia, AMD) and cloud providers (Microsoft, Amazon) are poised for growth, though risks from US export controls on advanced chips loom large.

Gulf airlines, including Etihad Airways, placed orders worth billions for widebody jets, primarily from Boeing, powered by GE Aerospace engines. Etihad alone committed $14.5 billion to Boeing aircraft, reflecting robust post-COVID demand for long-haul travel.

Education Boeing and GE Aerospace are key beneficiaries, with potential for sustained revenue growth as global airline capital expenditure rebounds.

Defence deals worth $180 billion were signed, focusing on drones, missile systems, and aircraft. Companies like Raytheon, Lockheed Martin, and Northrop Grumman secured multi-billion-pound contracts, aligning with regional security priorities.

Investment implications of the deals on US economy are manifold. US defence stocks are well-positioned, though long production cycles and export compliance pose risks.

The UAE’s energy sector saw significant commitments, including a $60 billion oil and gas expansion led by Adnoc in partnership with ExxonMobil, Occidental Petroleum, and EOG Resources. Qatar’s LNG terminals and clean energy projects further underscore the Gulf’s energy ambitions.

Energy majors and infrastructure firms like GE Vernova benefit, with long-term contracts ensuring stability.

Emirates Global Aluminium (EGA) announced plans for a new US smelter to double domestic aluminium production, part of the UAE’s $1.4 trillion investment pledge in the US over the next decade. Materials and industrial sectors also will gain from cross-border investments, enhancing supply chain resilience.

The UAE’s stock markets have responded enthusiastically, with the DFM General Index hitting a record high of 5,439.61 and the ADX General Index nearing its 52-week peak at 9,645. Sectors such as consumer discretionary (+6.90 per cent), materials (+6.85 per cent), industrials (+4.34 per cent), and financials (+3.09 per cent) led gains, driven by strong corporate earnings and increased foreign investment.

Vijay Valecha, chief investment officer at Century Financial, noted that the $200 billion in UAE-specific deals has drawn global attention to the country’s stable political climate and growing status as a financial hub. “These agreements signal a new era of collaboration, boosting liquidity and trading volumes,” Valecha said.

Despite the optimism, investors must remain vigilant, according to analysts.

According to Chanana, key risks include export controls as US national security reviews could limit AI chip exports, impacting Nvidia and AMD; execution delays as supply chain bottlenecks and regulatory hurdles may delay projects, affecting revenue for defence and energy firms.

Other risks include geopolitical volatility such as tensions in the Middle East, Iran-related conflicts or Red Sea disruptions, could derail deals. Valuation concerns: High valuations in AI and defence stocks leave little room for error, with potential for sharp corrections if expectations falter. Sovereign exposure: Heavy reliance on Gulf state-owned entities like Adnoc and G42 introduces concentration risks.

Trump’s GCC tour has redefined the UAE-US economic partnership, generating opportunities that align with the second largest Arab nation’s vision to diversify and innovate. For investors, the focus should be on policy-driven sectors — AI, aviation, defence, and energy — while maintaining a selective approach to mitigate risks.

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