More than one year since the start of a trade war between Washington and Beijing, economists from Japanese investment bank Nomura found evidence that the U.S. and China — in order to avoid elevated tariffs — have cut down importing certain goods from each other.
Instead, importers in the two countries have been sourcing for the same products from alternative locations not targeted by tariffs, the economists said in a report outlining their findings. Vietnam has so far emerged as the largest beneficiary of that diversion in trade flows, gaining an estimated 7.9% of its gross domestic product from those new business, according to Nomura.
That tariff fight has resulted in the U.S. and China importing fewer goods from each other, especially products subject to higher levies, said Nomura. In addition to Vietnam, the other major beneficiaries from the trade war are Taiwan, Chile, Malaysia and Argentina, the bank said.
These are some of the products that Nomura said the top five beneficiaries have been exporting more as a result of the trade war:
· Vietnam: phone parts, furniture, automatic data process machines
· Taiwan: typewriter parts, office machines, phone parts
· Chile: copper ores, soybeans
· Malaysia: electronic integrated circuits, semiconductor devices
· Argentina: soybeans
While the study showed that third-party economies can benefit in the U.S.-China tensions by becoming substitute sources for goods subject to elevated tariffs, Nomura economists warned that the findings don’t paint the full picture of the trade war.
The detrimental effects may include companies holding back investment plans due to uncertainties on trade, and falling demand in the U.S. and China because companies and consumers in both countries end up facing higher costs due to the tariffs.
Reference: CNBC
Read more: https://www.cnbc.com/2019/06/04/in-the-us-china-trade-war-here-are-the-economies-that-are-winning.html
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