United Nations, Nov 6 Taiwan and Mexico have emerged as the biggest beneficiaries in the ongoing US-China trade war. According to data from the first six months of the year, most of the cost of higher US tariffs on China has been passed down to US consumers and firms.
Vietnam, with its emphasis on export-oriented growth, presents a contrast to India showing that it was able to benefit much more from the trade diversification.
“US consumers are paying for the tariffs …in terms of higher prices,” said Alessandro Nicita, an economist at the UN trade agency, UNCTAD. “Not only final consumers like us, but importers of intermediate products – firms which import parts and components from China.”
Washingtons’s tariffs caused a 25 per cent export loss for China “inflicting a $35 billion blow to Chinese exports in the US market for tariffed goods in the first half of 2019,” a research paper from the UN Conference on Trade and Development (UNCTAD) said.
India sent $755 million more in exports to US
Moreover, India sent $755 million more in exports to the US in first half of 2019 as a result of the trade war ,according to the trade arm of the UN.
In June, the US removed the General Scheme of Preferences benefits for India.
Trade diversion effects for India were smaller compared some other countries, “but still substantial”, a research paper from the UN Conference on Trade and Development (UNCTAD) said.
The paper on trade and trade diversion effects of US tariffs on China that was released in Geneva on Tuesday said, “US tariffs on China are economically hurting both countries. The tariffs have resulted in a strong decline in US imports from China. US losses are largely related to higher prices for consumers.”
But it is also helping other countries like India that are not directly involved in the trade war as the US increased imports from them by about $21 billion in the first six months of the year.
The paper said that the office machinery and communication equipment sectors were hit the hardest for China, with a total reduction of US imports worth about $15 billion for the first half of 2019.
India made the most gains in the chemical sector, about $243 million; electrical machinery, $83 million, and other machinery, $68 million, it said.
Its exports rose by $2.6 billion, with electrical machinery accounting tor $400 million and communication equipment $1.1 billion, according to UNCTAD.
But it added that Chinese firms being able to retain 75 per cent of their exports despite the higher tariffs showed their competitiveness.
US, China tariffs WAR
Last year, US and China initially raised tariffs on about $50 billion worth of each other’s goods and Washington later hit Beijing with an additional 10 per cent tariff on $200 billion worth of Chinese imports.In June, the US increased the tariffs to 25 per cent.China has also increased tariffs on US products, mainly hitting the agriculture sector from which Trump draws a significant part of his support.