As the trade war between China and the US continues, many people are predicting large negative impacts on the global economy. If a trade deal is not met by March 1st, the US will raise tariffs from 10% to 25% on Chinese goods. The UN Conference on Trade and Development has spoken out about the negative impacts this will have. The entire international trading system will see huge effects. Smaller less developed countries will feel a huge set back as aftershocks go through the global economy. Companies will shift away from Asian producers and supply chains and look elsewhere. They also warn that the US should not be expecting much business to come from this; only 6% are predicted to come and produce in the US. There is also worry that this trade war may trigger other trade wars in response and cause more damage to the global economy. Despite all these negative impacts, there are some countries who are expected to benefit. Countries like India, Brazil, Australia, the Phillippines, and Vietnam are expected to have a huge economic boom as companies may choose these areas to produce in.
It will definitely be interesting to see the effects on different economies as this trade war commences. China has such a large economy that such negative damage will definitely be felt around the world.
I also think it will be interesting to see the effects on the US economy and whether we will end up benefiting from this after all. No matter what happens, there will be both short term and long term effects from this.
Link: https://www.bbc.com/news/business-47126114
3 comments:
Caroline, this article is extremely interesting. You'd think by now these countries would have come together to make agreements by now, especially considering the negative impact it will have on China. The interesting part in all of this is what you mentioned, how it will affect other countries. Obviously other countries with low cost of production would have positive repercussions from this. For the economy as a whole, fingers crossed that the US and China can agree on something soon.
Considering China takes considerable portion of manufactured goods and their increasing market power and shares, this will definitely affect not only the States but the whole world. Seems that the other countries mentioned (Vietnam, Brazil, India, etc.) are expected to benefit because they also have some percentage over the manufactured goods industries. I am interested to see how the situation goes and what will happen in the future due to it.
China and the US trade market have large impacts on the global economy. If the US does not agree on a trade deal that is favorable for both China and the US, the US could end up raising tariffs on Chinese goods which would affect the Chinese market and economy, and this could lead China to retaliate and put a higher tariff on US goods. Some of the poorer countries may benefit from this tariff war if they create trading agreements with the United States, China and other European nations to offset the higher tariffs from both China and the United States. This tariff war will have a huge long term effect on economic growth, which could even lead to another recession.
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