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Main » 2019 » February » 12 » Trade war could benefit Europe, Mexico and Japan, the US and China
Trade war could benefit Europe, Mexico and Japan, the US and China


HONG KONG - A trade war between the United States and China has caused major disruptions in global business, but for some countries it may also bring benefits. 

According to a study published this week on Trade and Development, the United Nations Conference, in Europe, Mexico, Japan and Canada can increase their profits by tens of billions of dollars due to export orders, if the conflict drags on. 





"The impact of the US-China tariffs will basically distorting", - said Pamela Cook-Hamilton, Head of UNCTAD's international trade. "Bilateral trade between the US and China will be reduced and will be replaced by trade from other countries." 

The study showed that the rate of "little help domestic firms" in the United States and China. And even if they would benefit from exporters in other countries, the rates are also at risk to cause devastating negative consequences throughout the world. 

US and Chinese governments are trying to make a deal. If they fail to reach an agreement before the deadline (1 March), the United States will increase tariffs on Chinese goods from 10% to 25%. 

The UN estimates that of the more than $ 300 billion in trade between China and the US, which have been affected by the new tariffs from July, about $ 250 billion, probably will move to other countries. According to research, the European Union should receive the largest share - about $ 70 billion of new export. This is due to the fact that the unit of the country are competitive on the world market and have the greatest potential for increasing exports, the report said. Mexico, Japan and Canada could add more than $ 20 billion in new exports. 

"Bilateral rates changing global competitiveness for the benefit of firms operating in the countries to which they do not directly affect", - says the UN statement.

Potential "domino effect"

But the successes of some countries may be undermined by the other aspects of a trade war, which led to slower economic growth in China and provoked volatility in the world markets. 

According to the UN said that the ongoing tariff war can inflict even greater damage "is still fragile global economy," disrupting global supply chains and influencing commodity prices and financial markets. The survey says that "more and more countries can join the fight", by entering their own tariffs and that "trade tensions could escalate into a currency war." 

Even if some of the European industry could benefit from trade, many of the leading companies of the continent are not immune from the conflict because of their global operations.

German automakers Daimler and BMW, which export high-end cars in China with its US plants, said last year that Chinese tariffs on US-made cars reduce their profits. 

The conflict between the US and China also led to a distortion of the main industries in some countries. Tariffs on US soybeans prompted Chinese importers move to Brazilian suppliers in the past year. 

Brazilian farmers are struggling to benefit from such a development, according to the UN. They do not want to make large investment decisions that may become unprofitable for them.

Rising prices for soybeans in Brazil has also led to higher costs for local businesses who want to buy soybeans for animal feed and other purposes. 


WELTRADE analyst



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