Effect of global tariffs on Middle East not yet clear, says IMF’s Azour

The effect of the global tariff war has not yet been fully felt or understood in the Middle East, the IMF’s top official in the region has said.

Jihad Azour stressed that there must be closer co-operation among neighbouring states and resilience in the face of a rapid geopolitical shift. He spoke at the Arab Fiscal Forum, part of the World Governments Summit in Dubai this week.

“Trade is changing. All that we saw in 2025 … the change in tariffs but also the change in the movement of trade globally,” said Mr Azour, who is director of the Middle East and Central Asia Department at the International Monetary Fund.

“Therefore, we need to understand how this geoeconomic transformation is going to affect our economies.

“And for a region that is central to global trade – physically central – but also in terms of movement of goods flows, and now financial flows.”

The Gulf largely escaped the effects of US President Donald Trump’s tariff war.

It had the lowest penalising tariffs on goods, and many, such as oil and gas, were exempt, even if producers of aluminium were not. But the region is a major handler of goods and could still see a knock-on effect.

“The second point is how this is going to translate into adjusting our regional co-operation. Because regional co-operation has to change with the trends that are taking place,” Mr Azour said.

“This is what makes 2026 a very important year.”

AI job disruption

Mr Azour said the region has been quick to harness artificial intelligence, but that the effects on working life is yet to be fully understood.

“AI is going to change our lives. It’s going to change our work. And it’s also a great potential for our economies,” he said.

“We need to harness the benefits. Some countries have already invested into it – UAE, Saudi, Qatar, others are following suit.

“It’s also very important for us to see what the implications are. Labour markets are going to change. Jobs will be challenged, but also jobs will be available. It’s very important to understand how we need to adapt our labour market for this important transformation.”

Last month, at the World Economic Forum in Davos, there were a string of warnings about the not-yet-understood effects of AI on jobs.

Anthropic CEO Dario Amodei warned that AI could eliminate up to 50 per cent of entry-level white-collar jobs within five years, particularly roles like basic administrative tasks, paralegal and analyst jobs.

He gloomily described the potential creation of a permanent underclass of unemployed or very low-wage workers if society does not plan for significant disruption.