Anita Gupta, CIO of Wealthbrix Capital Partners, shares her take on the U.S.-Europe trade deal and how Middle East markets are reacting to President Trump's tariff policies.

Dubai

A market strategist has indicated that recent U.S. trade tariff agreements, including those with the European Union and ongoing negotiations with China, have provided some certainty for global markets and boosted sentiment. However, the impact of these tariffs on Middle East markets, particularly those in the Gulf Cooperation Council (GCC), is expected to be minimal due to the limited share of exports to the United States from the region.

The strategist noted that while certain sectors such as aluminum in the UAE are subject to tariffs, these measures are not significant enough to alter the region's economic outlook. Additionally, oil and gas exports, which are major economic drivers for the GCC, are not currently affected by the tariffs. Inflation in the U.S. is also being driven more by housing costs than by imported goods from the Middle East.

Trump's tariffs not a gamechanger for Middle East markets: Strategist

There is a lot going on on the trade front. There's a deal that has come through with EU and the United States. Of course we're waiting on the talks between China and the United States today over in Sweden. But there is optimism in the market how it's playing out. It's a very very mixed. What do you think is moving the markets today. Good morning Emily. I think that the certainty around the trade tariff deals has been a big positive for market sentiment. We have already had Japan sign up for a 15 percent tariff for goods being exported to the US. Now you've got the other big block. That's the EU. So you've got more and more countries that are coming into the trade tariff deals. And now there's a certainty for U.S. corporates as to what the impact on their bottom lines would be. So what's moving the markets today. Of course we've already built into a great extent that the tariffs you're not going to see August 1st as a repetition of Liberation Day. That's been very positive. We've had a great run for the year so far with global equities up 13 percent already. I think going forward more tariff deals are going to come into place. We've got a good earning season in place. What's going to move the markets further is what the corporates say about the effect of tariffs on their bottom line. Thank you. Now also this week is the Federal Reserve. We're expecting some decisions and of course there's going to be a lot of verbiage that comes with it. What are you looking to for midweek and the FOMC. What we expect from the FOMC is that they will keep rates on hold. We do have two of the FOMC members who have been talking that they would like to have a rate cut both you know including Governor Waller. When we look at what Chair Powell thinks he is looking for more data he is looking for more CPI reports. The PC report comes out after July 30th after the Fed meeting. We've got critical data coming out after the Fed meeting. The impact of tariffs on inflation we have seen the latest CPI reading core CPI up point two percent month on month. So that's very much in line. But we are looking at a core CPI in the range of 3 percent. We are factoring in two cuts this year with September being the first. Again data is important. I don't think that the pressure from President Trump is going to be the governing factor in the Fed lowering rates at this point. Yeah we did see that meeting and President Trump's visit to the Fed last week. That was watched very very closely for all that was going on there. Speaking of President Trump the FT is reporting that Donald Trump is freezing export controls to secure a trade deal with China. This as we know the two sides will be meeting of course the trade delegations of Holly Fung on the Chinese side. We've got Besson on the U.S. side meeting in Stockholm today. I know that the Chinese side will be in Sweden for at least three days. So how long these talks will last. We remains to be seen. But in previous times we've known that it's lasted for at least two days. So it's looking at these export controls to be part of the trade deal with China in order to secure a deal. As we talk about these trade deals August 1st is the tariff deadline. So everybody is looking to Friday. What is the impact on the GCC and the Middle East. When we are looking at the GCC exports to the U.S. are a very small part of total exports for the UAE. It's around 2 percent for scarce. It's a little higher at about 5 percent for the U.S. for the UAE. Aluminum is important. We currently have 25 percent or so tariff rate. But it's not a very big mover for the UAE because as I said the U.S. is not a large part again for the U.S. and we look at inflation we look at goods imported. It's not going to be a big game changer. The biggest component of inflation so far has been housing. So in terms of economic growth we don't see an impact on tariffs. Again oil and gas are not at this point subject to tariffs. So for the case again it is not a game changer.

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