US President Donald Trump and Chinese President Xi Jinping talk as they leave after their bilateral meeting in Busan, South Korea, on Thursday. Reuters
US President Donald Trump and Chinese President Xi Jinping talk as they leave after their bilateral meeting in Busan, South Korea, on Thursday. Reuters
US President Donald Trump and Chinese President Xi Jinping talk as they leave after their bilateral meeting in Busan, South Korea, on Thursday. Reuters
US President Donald Trump and Chinese President Xi Jinping talk as they leave after their bilateral meeting in Busan, South Korea, on Thursday. Reuters


The US-China trade truce shows Trump is open to 'the art of the possible'


  • English
  • Arabic

November 02, 2025

The breakthrough achieved at the recent summit between US President Donald Trump and Chinese President Xi Jinping was limited to trade. It involved behind-the-scenes concessions from both sides so that each could secure what it wanted at this juncture.

However, the leaders didn’t address the political issues that might have otherwise obstructed the trade negotiations – including Taiwan’s future, competition in the Pacific, Sino-Russian relations and Washington’s insistence that Beijing reduce its nuclear arsenal. Mr Trump’s relatively calm demeanour signalled a readiness to postpone discussions on the thornier issues and settle for what’s possible.

This approach is likely to guide his upcoming meetings as well, especially with Saudi Crown Prince Mohammed bin Salman who is expected in Washington this month, and possibly with Israeli Prime Minister Benjamin Netanyahu.

Mr Trump’s strategy is seeping into the second component of his plan for Gaza, namely, his broader vision for the Middle East, which revolves around the Abraham Accords. He has repeatedly said that the key to Arab engagement with these accords lies in Saudi Arabia. His team also views Syria as a critical piece, given its geographical proximity to Israel, and is working hard to secure a breakthrough on this front.

At the Future Investment Initiative conference in Riyadh last week, key features of Saudi relations with the world came to the fore particularly with American investment leaders, who were present in large numbers, including chief executives of the largest firms ranging from banking to AI. The primary focus was to attract US and global investment into Saudi Arabia.

AI was one of the two stars at the conference, with the other being Syrian President Ahmad Al Shara, who made it clear that the key to his country’s resurgence lies with the kingdom.

Riyadh supports Syria’s path to recovery, something that aligns with the Trump administration’s investment in the country and its efforts to persuade the US Congress to lift sanctions completely. Saudi Arabia wants Syria brought back into the Arab fold so that it doesn’t fall exclusively into Turkey’s orbit. Damascus also matters to all Gulf states as a counterweight to Iran’s regional project.

Thus, Syria represents a strategic investment for the Arab world, as it does for Turkey, the US and Europe. Washington is trying to pave the way for security agreements between Syria and Israel that could lead to border normalisation. It also seeks to normalise the border between Lebanon and Israel, even as a return to war appears looming.

Washington and Riyadh don’t disagree on many points related to these issues. So when Prince Mohammed visits the US, discussions are expected to focus on ways to enhance co-operation and mutual understanding, especially on Syria and Lebanon. However, disagreements will surface regarding Washington’s push for Arab and Islamic countries, particularly Saudi Arabia, to normalise with Israel.

US-Saudi relations, especially in investment and security, will take precedence during the leaders’ meeting this month. It is no secret that Riyadh seeks to deepen its bilateral ties with Washington, while the US insists on being Saudi Arabia’s sole security partner among the world’s major powers.

The main stumbling block to deepening US-Saudi security ties is Washington’s insistence that Riyadh join the Abraham Accords. But the latter has insisted on the establishment of a Palestinian state as a condition to join the accords.

The problem is that many in Washington’s political and policymaking circles appear to believe that this hurdle can be sidestepped with creative ideas. But during my visit to Riyadh for the FII conference, it became clear to me that Saudi Arabia is clear-eyed on the issue of Palestinian statehood.

The main stumbling block to deepening US-Saudi security ties is Washington’s insistence that Riyadh join the Abraham Accords

This position might frustrate American policymakers, but they must understand that both the Saudi government and its people are not willing to overlook what the Netanyahu government has done to Palestinians in Gaza – massacres, starvation and annihilation – no matter the level of anger towards Hamas and its actions on October 7, 2023.

Mr Trump would, therefore, be wise to distinguish between the vital bilateral relationship between the US and Saudi Arabia, and the issue of Riyadh’s position on Israel. If the US President can persuade Mr Netanyahu to agree to the establishment of a Palestinian state, he will have carved out an unprecedented path.

What does the “art of the possible” mean for Mr Trump when it comes to the Middle East?

The US President is an exceptional figure with unconventional abilities – ones he has applied in the past and could apply again, if he chooses, with both friends and adversaries. The “possible” lies in exerting serious pressure on Israel to accept the two-state solution and the creation of a Palestinian state, something that was for decades US policy, and one the Trump administration must commit to seriously.

The possible is in Mr Trump’s hands: to deliver justice to Palestinians through a demilitarised state, while continuing to guarantee Israel’s security in what remains an unparalleled relationship. The possible lies in real pressure on Israel to let it know that America will no longer indulge it unconditionally and without accountability.

The possible lies in the US President’s ability to forge unconventional paths because he has the vision to grasp the future. If only he would act on it.

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

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Updated: November 03, 2025, 2:32 AM