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By Alexander Cornwell
(Reuters) -The United States and the United Arab Emirates have agreed to start negotiations for a potential bilateral trade agreement that could ease tariffs on the Gulf state’s steel and aluminium industry, according to four people familiar with the matter.
Emirati officials discussed the possibility of a trade agreement with U.S. counterparts during President Donald Trump’s two-day visit to Abu Dhabi last month, the sources said.
The Office of the U.S. Trade Representative did not respond to a request for comment. Neither did Emirati officials.
Like other nations, the UAE has been hit by Trump’s 10% baseline tariff on its exports to the United States. But its steel and aluminium products have also been hit by a 25% tariff that the Trump administration is now doubling to 50%.
While the UAE is a major oil producer, its steel and aluminium products are significant non-oil exports. In 2024, the UAE was the second-largest steel and aluminium exporter to the U.S., accounting for 8% of total U.S. consumption, data shows.
In Abu Dhabi, Emirati officials highlighted to U.S. counterparts comprehensive trade deals that it had signed with other countries over the past three years, the sources said.
The UAE was capable of moving quickly on trade talks, Emirati officials told their U.S. counterparts, they said.
The Gulf state has signed bilateral trade deals, known as Comprehensive Economic Partnership Agreements, with several countries since 2022, including India, Turkey and Australia.
The pact with India was negotiated in just 88 days.
The sources said that U.S. officials had responded positively, although it was unclear when talks would start. Two of the sources said Washington was likely to negotiate a limited deal that would fall short of a comprehensive free trade pact.
However, they said any agreement, if reached, would likely still be called a Comprehensive Economic Partnership Agreement (CEPA), the same branding as the UAE’s other trade deals.
The UAE is Washington’s biggest trade partner in the Middle East, according to the Gulf state’s foreign ministry. Bilateral trade in 2024 was valued at $34.4 billion, according to U.S. trade data, with the U.S. enjoying a $19.4 billion surplus.
The Gulf state, which is reliant on the U.S. security umbrella, has pledged to invest $1.4 trillion in the U.S. over the next decade. Its sovereign wealth funds, including Abu Dhabi’s $330-billion Mubadala, are already big U.S. investors, and Trump and his family have business interests in the UAE.
The UAE is influential in the region and hosts American soldiers on its bases. It is also negotiating a free trade agreement with the European Union. Gulf states Oman and Bahrain have bilateral free trade agreements with the U.S.
(Reporting by Alexander Cornwell; additional reporting by Andrea Shalal in Washington; Editing by Toby Chopra)
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