Trade war Donald trump with China is already undermined the growth of the Chinese economy and hurt American companies. But someone got the benefit. And it’s not the United States and China, estimated by experts of the United Nations.
Due to the increased import duties American companies reduce procurement in China, and Vice versa. They have to look for a replacement for the providers of goods and components, which allows other countries to increase exports.
“More than any other from the tensions between the U.S. and China will benefit countries that technological and economic development will help to replace the products of the American and Chinese firms,” reads the report of the UN Conference on trade and development (UNCTAD).
USA raised tariffs on Chinese exports worth 250 billion dollars a year, and China has imposed
tariffs American goods at $ 85 billion. If prior to March 1 Washington and Beijing agree, trump is threatening to escalate.
The tariff war has forced companies to look for suppliers and contractors in other countries. However, the stated purpose — to support domestic producers — unattainable: they receive only about 5% of the transferred business, estimated by the UN.
Moreover, the research results were approximately the same for all industries: from mechanical engineering, forest and chemical industry until telecommunications equipment and furniture.
Who will replace the other 90% of the decreasing exports from China and the United States totaling about $ 300 billion? About 70 billion of exports will be in the 28 EU countries, 20 billion — Japan, Mexico and Canada, says the UN report.
However, the exports of developed countries is a drop in the sea. Therefore, in a dozen States that redistribution of the world trade flows will have the greatest benefit mainly developing countries.
Mexico and Viet Nam, for example, the trade war the US and China
promises a significant increase in revenues from sales of goods and services abroad. Transferred to these countries on business will provide more than 5% of their future exports, says UN.
The winners will not
The redistribution of the world market will have a significant impact on some countries, but the pattern of world trade in excess of
17 trillion dollars a year, it is not so noticeable. However, the trade war the US and China will cause significant damage to the world, sure
the UN experts.
“The consequences for the whole international trading system would be extremely negative,” said Pamela Kok-Hamilton, one of the leaders of UNCTAD, in one of the press conferences.
“We will see currency wars, and a wave of devaluation, stagflation and unemployment, but more importantly, it threatens to spill over the edge and cause distortions in other areas.”
Suffer, primarily, developing countries.
A significant proportion of Chinese
exports to the United States, almost 40% is parts and components, intermediate product, from which the Americans are doing your end.
If the duties cut of these sales, the Chinese will reduce the purchase down the production chain — because they buy components, mostly neighbors in the region.
According to experts of the UN, this “Domino effect” will cost South-East Asia 160 billion of lost revenues.
Economists at the end of last year, the chorus about that trade wars are starting to affect China’s economy, whose many problems.
The slowdown of Chinese growth, in turn, leads to a drop in prices for raw materials — the main export commodity for some countries. And the flight of investors in dollar assets reliable and devaluation in order to increase competitiveness, increase the cost of most developing countries of servicing external debt.
And that their troubles were not
“Another reason for concern is the likelihood that China and the United States followed by other countries, and protectionism will reach the world level. And it primarily affects the weaker countries, so it is important to keep the multilateral system of international trade and the access of poor countries in the world
market”, warns the UN.