How Trump's Gulf visit could transform the Middle East

In addition to the many trade and business deals, and the significant political announcements made during Donald Trump’s visit to the Gulf, the trip itself marks an important shift in the geopolitical landscape.

First, for a US president to undertake a multi-day trip to the Middle East – especially as his first official overseas visit of this term – and not to include Israel, is largely unprecedented and indicates that the President sees the Gulf countries as America’s main centre of interest and partnership in the region. Israel remains, of course, a close US ally and partner, but its Prime Minister, Benjamin Netanyahu, must be left questioning where Israel lies in Mr Trump’s mind-map of interests and priorities.

Second, it’s no secret that Mr Trump does not have many warm relationships in Western Europe and has complained about US economic and security partnerships there. For Mr Trump to make the Gulf his first official foreign visit again in his second term also indicates that he sees the Gulf countries and economies as main geopolitical and geoeconomic players in many ways surpassing the states and economies of Western Europe. The leaders of Saudi Arabia, Qatar and the UAE now appear to hold more influence with the US President than do some of the leaders of America’s traditional Nato allies.

Third, Mr Trump in his second term is confirming the shift that he is leading in the principles of US foreign policy: from a foreign policy built on Cold War-style political and power alliances built in seemingly permanent confrontation or counterbalancing against semi-permanent adversaries, to a non-ideological, business-friendly, long-war-hostile, transactional foreign policy that shuns large alliance and confrontation systems, and looks after strictly defined US interests – primarily of the economic kind.

Trump speaks of friendship with UAE President Sheikh Mohamed

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This should be read clearly in Tehran and Moscow – neither capital can claim that Mr Trump has a deep-seated ideological or long-term hostility to their governments. It also enables him to be close to Mr Netanyahu while also embracing President Ahmad Al Shara of Syria and hurling olive branches at the supreme leader in Iran.

At the geoeconomic level, the main shift that this visit underlines is the deep alignment of GCC states alongside the US in the latter’s bid to build out its AI capacities ahead of China over the coming years and decades. AI will define the global power landscape of the 21st century, and AI processing centres require huge amounts of energy. The US does not have the capacity to ramp up its energy resources enough to meet the escalating demands of an ambitious US AI sector; the Gulf countries have the available energy and the ample cash reserves to meet a significant portion of this need.

At the geopolitical level, the most striking outcome of the visit is the US decision to lift sanctions on Syria. This decision, followed by a warm meeting between Mr Trump and Mr Al Shara, marks a sea change in the Levant. For the past six decades, Syria had been an adversary of the US and most of the Gulf states, first as a long-time ally of the Soviet Union, then as an ally – and eventually a client – of Iran. If Mr Al Shara can leverage this newfound support to lift his country from civil war and economic collapse, he will be realigning it alongside the Gulf and the US and reversing decades of recent Middle Eastern history.

The decision on Syria also has major and positive implications for Lebanon. Lebanon has paid the price of a hostile – and problematically aligned – Syria ever since the Baath Party took over Damascus in 1963. If Mr Al Shara succeeds in building a more inclusive and stable Syrian state and economy, and one that is not ideologically hostile to an independent Lebanon and aligned with the main Arab countries and the West, Lebanon’s path to regaining sovereignty and building a vibrant economy – already under way with a new president, prime minister and government – will have a solid and sustainable path forward.

The geopolitical move that is closest to Mr Trump’s heart and key to his vision of the region – the expansion of the Abraham Accords – did not make visible progress during this visit. He talked about it during his address in Riyadh and mentioned it as a desired end goal of the opening to Syria, but he is also aware that the conditions for moving forward are not currently available.

Saudi Arabia is the key country in any expansion of the Abraham Accords to other Arab or Muslim-majority countries, and Riyadh made clear once again that it requires an end to the war in Gaza and a solid pathway to a Palestinian state. Mr Trump is increasingly aware that Mr Netanyahu is neither willing nor able to move in that direction. The rift between Mr Trump and Mr Netanyahu is growing; whether it will boil over into the open and lead to public clashes like Mr Trump has had with other formerly friendly world leaders is – like everything with Mr Trump – impossible to predict.

For a US president to undertake a multi-day trip to the Middle East – especially as his first official overseas visit of this term – and not to include Israel, is largely unprecedented

Although the visit was not about the US-Iran talks, it did provide positive momentum for them. The US President spent several days with Gulf leaders, all of whom now have cordial relations with Tehran and are counselling a negotiated solution over any talk of war. And Mr Trump has made clear that he is looking for a win-win solution and is not an ideological foe. Of course, it helps that Iran’s proxy network has been devastated by Israeli and American military action, and that its economy is on its knees, made even more desperate by the recent decline in oil prices.

Mr Trump’s two geopolitical ambitions for the region – expanding the Abraham Accords and striking a lasting deal between the US and Iran – would be truly transformative if he can achieve them. A nuclear deal between the US and Iran is looking increasingly likely; expanding the Abraham Accords is ripe for the picking, but requires new leadership in Israel. In the meantime, Mr Trump has cemented globally significant political and economic ties with the key states of the Gulf. The region’s leaders can be effective partners with the US in achieving the breakthroughs that are still needed to create a truly peaceful, integrated and prosperous Middle East.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer