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While the inauguration of Donald Trump on January 20, 2025, is causing concern and unrest in Europe, the Gulf states see opportunities. In Europe, Trump’s unpredictability is viewed as an obstacle to pragmatic and trustworthy relations, and his ‘America First’ transactionalism poses a massive threat to the European economic system and trade freedom.

His withdrawal from the WHO and the Paris Agreement, his threats to Denmark to buy Greenland and Panama to buy the Panama Canal, as well as the introduction of high tariffs against Mexico, Canada, China – with threats of the same for the EU – also weaken the system of multipolarity. Furthermore, his crony capitalism – including his ‘Broligarchy’, which includes billionaires like Elon Musk and Mark Zuckerberg – and his racist populism are inspiring right-wing populists in France, Hungary, Austria, and Germany. Musk’s support for the German far-right party Alternative for Germany (AfD) via his social media network ‘X’ (formerly Twitter) is a striking example of this, directly influencing the German election campaign; Germany’s federal elections are set to take place on February 23.

The governments in the Gulf region – particularly in Saudi Arabia and the United Arab Emirates (UAE) – are viewing Trump’s presidency with less nervousness and panic. Instead, the rulers of the Gulf are pursuing a pragmatic approach to advance their national economic diversification and secure their own business models.

They see themselves as beneficiaries of a multipolar world order as they expand partnerships with US rivals such as China, India and Russia, and present themselves as confident middle powers within an increasingly influential ‘Global South’. For them, a multipolar or multiplex world order is not an obstacle or a threat, but rather, an opportunity.

At the same time, they recognise that Trump’s transactional approach and dealmaking politics align with some of their business interests. In Saudi Arabia, economic partnerships need to be strengthened urgently to achieve the socio-economic transformation goals of ‘Vision 2030’. Foreign direct investments (FDI) are expected to create local jobs, enhance Saudi Arabia’s economic position and increase competitiveness.

In ten years, Saudi Arabia will host a FIFA World Cup, which is intended to mark the peak of its success story. To achieve this goal, a stable and prosperous economy is needed domestically, regionally and globally. Hence, some hope that Trump will bring a business-oriented upgrade to bilateral relations, which under his predecessor, Joe Biden, were characterised by mutual distrust and distance.

In Riyadh, optimism prevails about improving relations, as Crown Prince Mohammed bin Salman has close ties to Trump’s son-in-law, Jared Kushner, who maintains business relations with the Saudi Public Investment Fund (PIF). The same applies to the UAE, which has built extensive networks with members of the Trump administration. The personalisation of politics under Trump is therefore seen as an advantage by Gulf rulers.

Gulf states also expect Trump to pursue a different US policy in the Middle East. Unlike Biden, Trump is viewed as a US president who could potentially exert influence over Israeli Prime Minister Benjamin Netanyahu to limit Israel’s military actions in Gaza or Lebanon and push for a long-term de-escalation of the Gaza war. In the Gulf, the temporary ceasefire between Hamas and Israel, along with the associated hostage exchange, is seen as a first step toward politically negotiating the catastrophic conflict. From a Gulf perspective, the Trump administration could play a crucial role in this process.

Nevertheless, the Gulf is not entirely optimistic about Trump’s presidency. Indeed, there is also scepticism and concern. Doubts primarily focus on the potential economic impacts, as well as regional and global stability.

The economic dimension

Economically, the US remains a key trading partner for the Gulf states. As a consequence, Trump’s isolationism poses a potential threat to their economic interests. This is especially true regarding his announcement to significantly increase US oil production (‘Drill, Baby, Drill’), which could have a major impact on Saudi Arabia’s economy. The kingdom requires a break-even oil price of USD 80-90 per barrel to balance its massive state expenditures; a sharp rise in US production could destabilise Saudi Arabia’s budget.

Trump’s demand that the Gulf states reconsider their oil price policies to help end Russia’s war against Ukraine has also caused unease in Riyadh. After all, within OPEC+, Saudi Arabia must maintain a balance with Russia to stabilise international oil prices. At the same time, there is an awareness that Trump views the Gulf states primarily as an ATM to invest in the US economy. While there exists some willingness to engage, Saudi Arabia’s main priority remains investing in its domestic market. Attracting US capital to Saudi Arabia could become more challenging under Trump, potentially harming the goals of ‘Vision 2030’.

The regional dimension

Given the tense regional situation, none of the Gulf states are interested in further conflict escalation. The Gaza war, the conflict between Israel and Hezbollah, the simmering tensions between Israel and Iran, the fragile situation in Syria following the downfall of Bashar al-Assad, and the unpredictability of the Houthis in Yemen are all sources of concern for Gulf rulers. As a result, they have pursued a strategy of diplomatic balancing, conflict management and derisking in recent years. Trump could jeopardise this course if he contributes to further escalation, or encourages Netanyahu to take military action against Iran’s nuclear program.

The Gulf states are determined to prevent this at all costs in order to safeguard their own interests and political stability. Trump’s controversial statement to ‘clean out’ Gaza and his request from Jordan and Egypt to accept displaced Palestinians in the event of a forced expulsion has been met with strong rejection in Amman and Cairo, and has caused concern among the Gulf states.

The global dimension

Finally, the growing rivalry between the US and China could further escalate under Trump and potentially result in a full-blown trade war. The introduction of tariffs already signals this direction. Since China is the most important trading partner for most Gulf states and a major buyer of fossil fuels, they have no interest in seeing Beijing isolated. Moreover, they do not want to be pressured by the US into choosing sides. Such a scenario would contradict their pragmatic business model and could once again jeopardise their own strategic goals.

Similar concerns exist in Europe. Countries like Germany rely on free global trade, as their economies depend on exports and flexible business relationships. While Berlin views China as a systemic rival, cutting trade ties is not an option amid an economic downturn. The European Union (EU) also needs China and new markets to remain competitive. At the same time, Europe fears Trump’s unpredictable policies could fuel conflicts in its immediate neighbourhood – such as the Middle East – and could increase migration flows to Europe; in turn, this may weaken Europe’s stability and promote the anti-migration propaganda of right-wing parties. Lastly, Europe is keen to diversify its energy partnerships and considers Trump’s push for heavily polluting, emissions-intensive energy production as a direct threat to its own energy transition efforts.

As shown, there exist clear similarities between Europe and the Gulf region in their assessment of Trump. This shared threat perception should thus encourage closer political and economic cooperation by emphasising common interests rather than differences. Without question, relations between the Gulf states and Europe have deteriorated significantly in recent years, as Europe has lost much of its moral credibility.

Amid the Gaza war, Europe is increasingly viewed in the Gulf as a hypocritical player; these reservations will not simply disappear. However, the shared concerns about Trump could serve as a confidence-building measure by helping both sides focus on their mutual strengths, rather than getting stuck in blame games and whataboutism. Ultimately, both the Gulf and Europe need each other to tackle common challenges together.

Economically, trade restrictions between Europe and the Gulf states should be gradually reduced in the medium term, even though negotiations over a Free Trade Agreement (FTA) have been stalled for years. Pragmatic solutions are needed to promote trade and investment while advancing mutual interests. In terms of energy policy, partnerships between individual Gulf states and certain EU member states such as Germany have significantly intensified in recent years, with a particular focus on hydrogen production.

However, these partnerships remain limited in scale. There still exists insufficient knowledge exchange, a lack of necessary infrastructure, and current market prices for hydrogen exports are not yet competitive. If both sides see this sector as a viable future industry, they must move beyond ambitious announcements and take concrete action. Targeted partnerships, training programs and knowledge transfer are just as essential as long-term incentives for the private sector to invest in this field.

In terms of mutual security interests, diplomatic dialogue between the Gulf states and Europe could be systematised to move beyond mere discussions and toward concrete action. Currently, there remain significant discrepancies between the Gulf states’ pragmatic approach to conflict management and Europe’s more values-driven stance. In the Gulf, regional crises are primarily viewed as security risks, whereas in Europe, they are often framed in terms of justice and human rights.

While both perspectives are valid, this divergence has often led to dysfunctional joint initiatives and a lack of coordinated action. However, with Trump seen as a potential disruptor of regional stability, both sides must work together more closely and reduce their dependence on US policies in the region. The Gulf states and Europe are now more aligned than ever before, and the wars in the Middle East pose a threat not only to the Gulf states, but also to Europe’s unity and its ability to act. This realisation must actively translate into a pragmatic and cooperative approach to security and regional stability.

In Saudi Arabia, for example, the fall of Assad is seen as an opportunity to build strong economic and political ties with the new Syrian leadership by leveraging the Syrian diaspora in the kingdom. A similar role is expected of Germany: both Germany and Saudi Arabia have influential Syrian diaspora communities, which could result in more cooperation to contribute to Syria’s reconstruction and stabilisation together with these communities. Furthermore, significant opportunities regarding the Gaza war and in managing relations with Iran exist, as various communication channels could be used to avoid future escalations.

Saudi Arabia, in particular, has great potential: the kingdom could play a more prominent role as a mediator and conflict negotiator by influencing the US and Israel. After all, it holds a powerful card with the potential for normalisation with Israel towards Trump. Additionally, ‘Vision 2030’ provides a chance for Saudi Arabia to contribute to regional economic stability, which could help crisis-torn countries like Palestine, Syria or Lebanon by offering economic incentives for investment, capacity development, and the building of efficient institutions. Europe should show a similar interest, which would open up new avenues for cooperation.

In times of a ‘Trump-noia’ in Europe, the perspective should shift from a paralysed, watchful stance to a proactive approach by working more closely with the Gulf states. This would allow both regions to collaboratively address shared challenges and build a model of partnership. By focusing on mutual strengths and priorities, Europe and the Gulf could forge a stronger, more resilient alliance that is better equipped to handle the uncertainties and disruptions of the current geopolitical landscape under Trump.