Tariffs bite and ripple through global trade and the Middle East
In April 2025, the United States shocked markets by imposing sweeping import duties, including a blanket 10% tariff on goods from all countries (with even higher rates on some). Such measures negated decades of trade norms overnight, sending a signal that the era of predictable free-trade flows is fading, notes Sam Achampong, Regional Director for the Chartered Institute of Procurement & Supply, Middle East.
For Middle Eastern economies that thrive on global commerce, these tariffs have been a wake-up call. Even if Gulf countries are not the direct target of Washington’s trade volleys, they are learning that tariff wars do not need to target you directly to hit you hard.
Higher costs and sudden rule changes ricochet through supply chains, making everything from raw materials to high-tech imports more expensive or harder to secure. In short, the Middle East finds itself navigating a trade landscape where the ground is shifting beneath its feet.
Yet amid the uncertainty, the region is adapting. A key theme has emerged from boardrooms to port terminals: procurement and logistics teams must work hand-in-hand to weather the tariff storm.
Tariff pressures
In the past, procurement (sourcing and purchasing) and logistics (shipping, warehousing, distribution) often operated in silos. Today, tariff pressures are bringing these functions into a closer alliance, breaking down old silos in the process.
Why is this so important? Because when tariffs drive up costs and complexity, every decision becomes a supply chain decision. Procurement professionals now routinely consult their logistics counterparts when choosing suppliers or planning purchases.
A change in supplier location can mean new shipping routes, different import duties, or compliance requirements, so procurement can no longer make those calls in isolation. Likewise, logistics managers are looped in early to assess how a potential sourcing switch (say from East Asia to Eastern Europe) will impact transit times, freight costs, and customs paperwork. The goal is to find solutions that balance cost and compliance without grinding operations to a halt.
Collaborative approach
This collaborative approach is as much about survival as it is about efficiency. Tariffs can change with little warning, throwing delivery routes and pricing structures into disarray. In this volatile environment, constant communication is key. For example, if a US tariff hike makes a certain import unviable, the procurement team might quickly seek an alternative supplier in a country with more favourable trade terms.
That pivot however only succeeds if logistics can swiftly line up new transportation plans and ensure all import regulations are met. Together, the two teams perform a kind of high-wire act, balancing cost control with the need to stay compliant with shifting trade rules. Companies that encourage their procurement and logistics units to problem-solve together are finding they can respond faster and smarter to sudden tariff shocks.
Crucially, this is not just an internal company matter; it often involves external partners too. Many firms in the Middle East are working more closely with freight forwarders, carriers, and even customers to navigate the tariff maze.
By collaborating on transport strategies, sharing real-time information, and jointly monitoring regulatory changes, they build a united front that keeps supply lines moving despite the headwinds. This kind of cross-functional teamwork, lightly wearing the badge of each side’s expertise, is becoming the region’s secret weapon in maintaining resilient supply chains.
Geographical risks
One noticeable strategy emerging from these discussions is a shift in sourcing toward nearer, more politically stable regions. Rather than rely solely on far-flung suppliers who may be caught in the crossfire of US–China trade tensions or other geopolitical risks, Middle East procurement teams are casting a wider (but closer) net.
Africa has moved into the spotlight, with East Africa in particular seen as an upcoming sourcing hub for everything from agriculture to textiles and industrial inputs Eastern Europe is also attractive – its proximity and relative stability make it a compelling alternative for goods traditionally sourced from farther east.
Furthermore, companies are looking right in their own backyard: intra-GCC trade is on the rise as Gulf countries explore what they can buy from each other before looking overseas. This regional recalibration of suppliers comes with big implications for logistics.
Shorter supply lines mean faster transit and potentially lower shipping costs, but they also require rethinking route planning. Instead of defaulting to the usual Asia-to-Middle East Ocean lanes, logistics planners are developing new routes: for instance, moving goods from East Africa across the Red Sea into Gulf ports, or trucking products overland from Eastern Europe via Türkiye.
Warehousing strategies
Warehousing strategies are evolving too. Some firms are setting up regional distribution centres or strategic stockpiles closer to home, ensuring they have buffer inventory in the Middle East to cushion against delays or trade policy surprises. By storing critical materials in UAE or Saudi warehouses, for example, a company can delay adjusting if a sudden tariff change disrupts its normal inbound flow.
On the flip side, sourcing closer to home can enable leaner inventories for certain items–if lead times are cut from eight weeks to two, you do not need to hold as much safety stock as possible.
Resilience is the watchword here. The Middle East’s logistics network is being stress-tested and strengthened in the process. We are seeing investment in alternative trade corridors that bypass trouble spots. The Gulf is increasingly acting as a global trade bypass lane, with its ports and free zones serving as transshipment and light manufacturing hubs to work around tariff barriers.
Positioning
The region is positioning itself as more than just a consumer of global goods, it is becoming a connector and conduit, linking Asia, Africa, and Europe in new ways. Intra-regional cooperation, such as the UAE’s recent comprehensive trade agreements with partners like India and Türkiye, also reflects a broader strategy to diversify trading options and reduce over-reliance on any single route or market.
For logistics managers, this ultimately means staying nimble and ready to pivot to new lanes and modalities as trade patterns continue to evolve. Responding to the US tariffs and the broader trade upheavals has been a trial by fire for Middle Eastern businesses–but it is one that is forging stronger, smarter operations.
The close-knit partnership between procurement and logistics, once a novelty, is now standard practice and a competitive advantage. Together, these teams are turning a daunting global challenge into a catalyst for innovation.
