Trade war results in higher prices for consumers, substantial export losses - UNCTAD study
|The Guardian reports the latest study conducted by the United Nations Conference on Trade and Development (UNCTAD) on the impact of the tariffs imposed by the US on China.
Key Highlights:
Trade and trade diversion effects of United States tariffs on China, shows that the ongoing US-China trade war has resulted in a sharp decline in bilateral trade, higher prices for consumers and trade diversion effects (increased imports from countries not directly involved in the trade war).
Trade diversion effects on African countries have been minimal.
By analyzing recently released trade statistics, the study finds that consumers in the US are bearing the heaviest brunt of the U.S. tariffs on China, as the associated costs have largely been passed down to them and importing firms in the form of higher prices.
However, the study also finds that Chinese firms have recently started absorbing parts of the costs of the tariffs by reducing their exports prices.
The analysis shows that U.S. tariffs caused a 25 per cent export losses, inflicting a $35billion blow to Chinese exports in the U.S. market for tariffed goods in the first half (H1) of 2019.This figure also shows the competitiveness of Chinese firms, which despite the substantial tariffs maintained 75 per cent of their exports to the U.S. The office machinery and communication equipment sectors were hit the hardest, suffering a $15 billion reduction of U.S. imports from China, as trade in tariffed goods in those sectors fell by an average of 55 per cent.
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