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How is the world affected by the US-China trade war?

Avatar of Nick John By Nick John Dec20,2023 #affected #China
How is the world affected by the US-China trade war? 4
How is the world affected by the US-China trade war? 4

Yesterday, the US officially imposed a 25% import tax on 34 billion USD of Chinese goods.

A few hours after the US announced the imposition of tariffs, China also launched retaliatory measures of equal value.

Last year, China imported 130 billion USD of American goods.

The direct impact of this trade war on China will be a 0.1%-0.3% decrease in GDP growth.

Skyscrapers in Singapore.

US tariffs on Chinese exports include engines, motors, construction, agricultural machinery, electrical equipment, telecommunications and transportation.

Not only will it affect the world’s two leading economies, many other Asian countries will also be affected by these moves.

South Korea’s GDP growth may lose 0.4% this year.

When analyzing the surplus value of Chinese exports, calculated by origin, the Organization for Economic Cooperation and Development (OECD) said that Taiwan is the Asian economy most involved in these goods.

Besides, many other factors also need to be considered.

Globally, according to data from the World Trade Organization (WTO), last year, total export turnover of goods increased by 11% to 17,200 billion USD.

Morgan Stanley estimates that the trade war could be seriously disrupted, because two-thirds of the goods exchanged between the two countries are in the global value chain.

Some other companies, such as DBS, believe that the US economy will be more affected than China’s, because US companies invest in China quite a lot.

Trade uncertainty could make banks concerned about their participation in affected industries, thereby affecting prices and credit flows.

A model by asset management firm Pictet shows that if the US imposes a 10% import tax, which is then pushed down on consumers through increased product prices, the global economy could fall into a state of growth.

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