A number of countries are benefiting from the trade war being waged by the Trump administration and the Chinese government. With China losing around 25% by value of its exports to the United States, places like Taiwan, Mexico, the European Union and Vietnam are benefiting, according to United Nations Conference on Trade and Development (Unctad) economist Allesandro Nicita. Countries in sub-Saharan Africa and the rest of the world have only felt “marginal” benefits in the form of increased exports. “Overall, the results indicate that the United States tariffs on China are economically hurting both countries. United States losses are largely related to the higher prices for consumers, while China’s losses are related to significant export losses,” Nicita writes in the introduction to an Unctad study on the effects of the standoff, which dates to mid-2018. He estimates that Chinese exports to the United States fell by US$35 billion, from US$130 bn in the first half of 2018 to US$95 bn in the corresponding period of 2019. Nicita notes that Chinese manufacturers have managed to retain 75% of the market despite the tariffs – largely by cutting margins. Americans are not just substituting Chinese imports with products from other countries – they are either going without or have increased local production. Of the US$35 bn Chinese export loss, US$21 bn (or about 63%) has been replaced by products originating from other countries, while the remainder of US$14 bn was lost due to lower demand in the United States and/ or not enough capacity from the rest of the world. Taiwan has been the biggest beneficiary, with exports largely of office machinery growing by almost US$4.2 billion in the first half of 2019. “Office machinery has been the hardest hit sector in the ongoing trade war, with United States imports from China falling by almost US$10 billion in the first half of 2019,” says Nicita. Mexico’s exports grew by around US$3.5 bn in the first half of the year, mostly in the agrifood, transport equipment and electrical machinery sectors. EU exports, mainly of machinery, grew by about US$2.7 bn. Vietnam saw growth mainly in exports of communication equipment and furniture to the value of around US$ 2.6 bn. “Communication equipment and furniture are two sectors where the increase in imports from other countries were not sufficient to replace the decline in United States imports from China. “In these two sectors Vietnam exporters benefited the most,” he writes. Exports to the US from the Republic of Korea, Canada, and India have risen by between US$ 0.9 and 1.5 billion. “The remainder of the trade diversion effects were due largely to the advantage of other South East Asian countries (US$ 1.7 billion),” says Nicita.
INSERT: Taiwan has been the biggest beneficiary, with exports largely of office machinery growing by almost US$4.2 billion in the first half of 2019. – Allesandro Nicita
