Trump Rejects Iran's Hormuz Proposal: What UAE Businesses Need to Know Now

On April 28, 2026, US President Donald Trump said he is “not satisfied” with Iran’s latest proposal to reopen the Strait of Hormuz, according to senior sources cited by Arabian Business. Iran has signalled willingness to negotiate but says the US is no longer in a position to “dictate” terms. Trump has told Fox News that Iran can call the US if it wants to talk — Washington will not make the next move.

What looked briefly like a potential resolution to the Hormuz crisis is now stalled. For UAE-based businesses, this is not background noise. It is a direct cost driver.

Where Things Stand on April 28

The key facts from this morning:

• Trump has publicly rejected Iran’s latest Hormuz proposal as insufficient
• Iran has said it will not accept conditions it views as US-dictated
• No new direct negotiations are scheduled as of today
• The Strait of Hormuz remains constrained for commercial shipping
• Oil tanker insurance surcharges remain elevated

This follows a period in late April where signals from both sides suggested a negotiated reopening was possible. Those signals have now reversed. The situation is back to stalemate.

For context on how this conflict has already affected UAE trade, see our earlier analysis on Strait of Hormuz impact on UAE business and the April 2026 oil and stalemate business costs breakdown.

What a Prolonged Stalemate Costs UAE Businesses

The Strait of Hormuz handles around 20% of global oil flows and is the primary shipping corridor for a significant portion of UAE imports and exports. When it is constrained, the costs flow through the entire UAE economy — they do not just affect shipping companies.

Shipping Surcharges

Freight rates on voyages through or near the Strait carry war risk insurance surcharges. As of late April 2026, war risk premiums for vessels transiting the Strait have added between 0.5% and 2.5% of vessel value per voyage, depending on the flag state and insurer. On a standard bulk carrier, this translates to additional voyage costs of USD 50,000 to USD 200,000 per transit.

Those costs do not stay with the shipping company. They are passed through to importers, then to retailers, then to end customers.

Import Price Inflation

UAE businesses that import goods through Jebel Ali have been absorbing elevated freight costs for weeks. Categories most affected:

• Manufactured goods from Asia — electronics, textiles, machinery. Alternative routing via Cape of Good Hope adds 10 to 14 days and significant fuel cost.
• Food imports — the UAE imports approximately 85% of its food supply. Fresh produce, dairy, and perishables are most sensitive to any transit delays or increased handling.
• Construction materials — steel, cement, and specialist equipment for active UAE construction projects have been subject to supply delays.

Practical impact: Many UAE importers are now booking cargo 4 to 6 weeks further ahead than they would in normal conditions. This ties up working capital in inventory and advance bookings.

Oil Price Uncertainty

UAE is a significant oil exporter, and higher oil prices benefit government revenues. However, for private businesses, elevated oil prices translate to higher fuel costs, higher freight costs, and higher raw material costs across the board.

Brent crude has remained above USD 80 per barrel through April, above the range most UAE SMEs modelled in their 2026 business plans.

What To Do If You Import Goods Into the UAE

Lock In Your Freight Rates

Spot freight rates are volatile right now. If you have predictable import volumes for the next 60 to 90 days, get quotes and consider locking in a contract rate with your freight forwarder. Spot rates could spike further if talks break down completely; they could also fall if a deal emerges unexpectedly.

What to ask your freight forwarder:

• Is the current rate inclusive of war risk surcharge?
• What is the surcharge amount per container?
• Is there a surcharge cap or is it variable?
• What alternative routing options are available (Cape of Good Hope, air freight for urgent goods)?

Review Your Supplier Contracts

Many supplier contracts have force majeure clauses that cover shipping disruption. Read yours carefully. Also check whether your contracts specify the cost of shipping as fixed or variable. If variable, you may be absorbing route surcharges without realising it.

Build Buffer Stock on Critical Items

If your business depends on a specific imported component or product that has no easy UAE-local substitute, carry more stock than you normally would. The current disruption pattern has involved short periods of elevated risk followed by partial easing — but predicting which direction the next move goes is not possible.

A 4 to 6 week buffer stock of critical items costs money in working capital but protects you from a production shutdown or sales gap if a shipment is delayed.

Check Your Business Insurance

Standard UAE business insurance typically does not cover losses caused by trade disruption or shipping delays. If you have contingent business interruption cover, read the policy to understand what is and is not triggered by a Hormuz-related disruption.

If your business is heavily import-dependent and you do not have supply chain disruption cover, speak to an insurance broker about whether it is available and cost-effective for your situation. See our UAE business insurance guide for a wider overview of what UAE businesses typically carry.

What This Means for UAE-Based Exporters

UAE exporters — particularly in sectors like re-export, food processing, and light manufacturing — face a different set of constraints.

Access to shipping capacity: Fewer vessels are willing to transit the Strait under current conditions. This reduces available shipping capacity on key UAE export routes to Asia and the subcontinent.

Delivery time commitments: If your export contracts have delivery time commitments, review whether current transit delays put you in breach. If you are shipping goods on a CIF basis (cost, insurance, and freight paid by you to a named destination), you are carrying the risk of delays.

Jebel Ali throughput: Jebel Ali Port, the largest container port in the Middle East, has been managing increased transit pressure. Berthing wait times and yard congestion have risen above pre-crisis norms. Factor in an additional 2 to 5 days of port processing time in current shipping plans.

What This Does Not Mean

It does not mean UAE business is shutting down. The UAE government and Jebel Ali have extensive contingency experience from previous regional disruptions. Alternative routes are operating. The economy is not in crisis.

It does not mean financial transfers are affected. Banking, SWIFT transfers, and payment flows in and out of the UAE are running normally. The disruption is physical — shipping — not financial. For UAE banking and transfer options, see our guide on sending money internationally from the UAE.

It does not mean you should exit or pause your UAE plans. The fundamental reasons to set up or operate in the UAE — tax position, location, logistics infrastructure — have not changed. The current disruption is a cost increase and supply chain management challenge, not an existential threat to UAE business.

The Scenario: If No Deal Is Reached in the Next 30 Days

The two scenarios for UAE businesses to plan for:

Scenario A — Partial deal or de-escalation: Shipping returns toward normal. War risk surcharges fall. Import costs ease. Most businesses absorb a 2 to 4 month period of elevated costs with no lasting damage.

Scenario B — Continued stalemate or escalation: Freight costs stay elevated. Some supply chains face structural rerouting via alternative routes (Cape of Good Hope adds roughly 10 to 14 days transit time from East Asia and increases freight cost by 15 to 25%). UAE importers with thin margins in sectors like retail and food face sustained margin pressure.

The honest answer: nobody knows which scenario unfolds. But businesses that have taken practical steps — diversified suppliers, buffer stock, locked-in freight rates, reviewed contracts — are better positioned for either outcome.

Key Actions for UAE Business Owners This Week

1. Talk to your freight forwarder today about current surcharges and route options
2. Review your top 3 most critical imports and check current lead times
3. Ask your insurer whether your policy covers trade disruption losses
4. Check whether any of your supplier contracts have pricing adjustment clauses for shipping cost increases
5. If you have USD-denominated import contracts and are paid in AED, check whether your foreign exchange exposure has changed given recent currency moves

The Hormuz situation is unlikely to resolve this week. Plan for 30 to 60 more days of the current conditions at minimum, and have contingency plans ready if it runs longer.

Situation as of April 28, 2026 based on Arabian Business reporting and publicly available shipping and trade data. We will update this analysis as the situation develops.