The ongoing trade between China and the US has intensified to a level where chances of compromise are fading faster. At the beginning of the year 2019, somewhere we all thought that this war might end in a few months. But unfortunately, the war is exacerbated.
Recently, the war between two world’s biggest economic countries has heated up in September 2019. The win-win formula of trade is turning to lose-lose situation.
China-US are decoupling, even if it’s hurting the global economy, decoupling is happening. Click to Tweet
“In the fight of two elephants, it’s always the grass who suffers”. Which means, regardless of who wins the war and who loses it – the entire globe is trampled. Other countries are concerned about the trade war between two big economies – China and the US. Both countries are huge markets for goods across the globe. So, their tariff rates and non-tariff regulations can affect the consumers and businesses globally.
(Learn more on Top 10 Exporting Countries for Textile and Apparel Industry.)
In the trade war, where countries are baring huge losses in business, some countries are boosting their economies out of it.
Here’s a list of countries benefiting by the trade war between two super-trading powers.
Vietnam, the steady out economic outperformer is getting affected. According to the International Trade Centre, exports out of Vietnam have risen to $290.4 billion last year from $176.6 billion worth of goods in 2016. US Census Bureau, Vietnam has a $39.5 billion trade imbalance with the US, in Vietnam’s’ favor. In nutshell, Vietnam is winning the trade war of two big economies.
The other country winning the US-China trade war is Mexico. This year, Mexico passed china to become the US’s largest trading partner. According to the office of the US Trade Representative, the US good trade deficit with Mexico was $81.5 Billion in 2018, a 14.9% increase over 2017. Census Bureau reported, the $9.9 billion trade deficit between Mexico and the US, is in Mexico’s favor.
Trades in goods and services between Mexico and the US totaled around $671.0 billion in 2018, making Mexico America’s third-largest trading partner, reported by the office of the US Trade Representative.
The world’s open emerging market – Chile has a trade agreement with 64 countries covering. 86.3 percent of global GDP. The country has planned to respond to US-China trade by opening still further markets to position itself as a regional financial centre, stated by finance minister Felipe Larrain. He also stated, that they are facing a trade war and a complicated international scenario, but they are responding it in a better way with more openness and improved access.
According to a report by Nomura, Chile is gaining 1.5% of GDP by trade diversion. Chile is getting benefited by the trade war between the two biggest economies.
The self-ruled island can spot an economic opportunity in US-China trade war. Taiwan’s economic ministry sees an improvement in Taiwan’s goods. In the peak-demand season for tech products, businesses are set to restructure their global supply chain due to the trade dispute between the US and China.
As reported by Nomura, the country is gaining 2.1% of GDP with the trade war. Taiwan is all set to top other Asian countries with the fastest growth in the year 2019.
Malaysia is prepared to boost its economy by importing business from China. Country’s economic growth is set to gain an addition 0.1 % points from manufacturing companies. Manufacturers based in
China are looking to shift their operations to other locations and Malaysia is one of them due to elevated U.S. tariffs.
The country has signed an agreement to export 1.62 million tons of palm oil worth US$900mil to China. In Malaysia, 82% of larger firms and nearly half of all small to medium-sized enterprises participate in global value chains, a report by Asian Development Bank.
According to Namura, Malaysia is gaining 1.3% of GDP because of the US-China trade war.
Who is Winning?
In the US-China trade war, other countries getting benefitted are Argentina, South Korea, Singapore, Brazil, and Canada. France is the biggest beneficiary country in Europe. Moreover, other European countries will benefit the least out of US-China economic conflict.
The retaliating moves by two biggest economies are not beneficial for either of the country’s economy. A few countries are getting benefits for a short time. Though, for a long period, the trade war between US-China is not in favor of the world’s economy.
Watch our latest webinar on “US-China Trade War: Impact On Textile And Apparel Sector“.