Countries that Profit from the Trade War with China

Wells Fargo Research Team Wells Fargo

Who Gains From China’s Pain? Mostly Vietnam, Mexico and Eurozone

Tariffs have reduced imports into the United States from China and reversed (at least temporarily) a decades-long expansion of the U.S. trade deficit with that country (Figure 1). Yet the trade war has not reduced total imports nor has it made a dent in the overall trade deficit (Figure 2). In fact, since the start of 2017, the trade deficit has widened 16.8%. Perhaps eventually production will shift back to the United States, but so far, there is not much evidence to support that supposition.

Instead, domestic importers are re-routing foreign supply chains. In this special report we look at how this global shift has impacted U.S. trade and which economies have benefitted. It is early days yet, but not too early to glean insights from what the data are telling us about who is benefiting from the trade war. The winners vary by industry, but the key benefactors appear to be Vietnam, Mexico and the Eurozone.

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Wells Fargo Research Team

Wells Fargo

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