The EU and Japan stand to benefit most from the US-China trade war, according to a report published by the United Nations Conference on Trade and Development (UNCTAD).
UNCTAD, in its Key Statistics and Trends in Trade Policy 2018 report, says that competitive countries and regions with the manufacturing capacity to replace the US and Chinese firms stand to benefit from the tariff dispute.
EU exports will grow by approximately US$70 billion of US-China bilateral trade and Japan, Mexico and Canada will each capture $20 billion, according to UNCTAD.
The report goes on to say that of the $250 billion in Chinese exports subject to US tariffs, approximately 82% will be captured by firms in other countries, with 12% being retain by Chinese firms and 6% staying in the US.
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Speaking about the report Pamela Coke-Hamilton, head of UNCTAD’s international trade division, said this: “Because of the size of their economies, the tariffs imposed by Unites States and China will inevitably have significant repercussions on international trade.
#TradeWars impact on the US
Of the approximately $85 billion in US exports subject to China’s tariffs:
– about 85% will be captured by firms in other countries
– US firms will retain less than 10%
– Chinese firms will capture only about 5%
— UNCTAD (@UNCTAD) February 5, 2019
“Our analysis shows that while bilateral tariffs are not very effective in protecting domestic firms, they are very valid instruments to limit trade from the targeted country.
“The effect of US-China tariffs would be mainly distortionary. US-China bilateral trade will decline and replaced by trade originating in other countries.”
The US-China trade war has been going on since early 2017 and has seen approximately $400 billion worth of tariffs placed in total.