European Union likely to profit the most from US-China trade war, UN group says
- European companies likely to capture US$70 billion in trade because of the dispute between President Xi Jinping and American counterpart Donald Trump
- Japan, Mexico and Canada also likely to benefit from tensions, according to the United Nations Conference on Trade and Development (UNCTAD)
The European Union is set to be the biggest winner of the trade war that has raged between the United States and China since last year, according to a new study by the United Nations Conference on Trade and Development.
The United Nations organisation estimated that European companies are likely to capture about US$70 billion in trade – about US$50 billion in Chinese exports and US$20 billion in US exports – that have traditionally passed between the world’s two largest economies.
Countries that are likely to benefit the most from trade tensions are those which are more competitive and have the economic capacity to replace US and Chinese firms, the United Nations Conference on Trade and Development (UNCTAD) said.
“Our analysis shows that while bilateral tariffs are not very effective in protecting domestic firms, they are very valid instruments to limit trade from the targeted country,” said Pamela Coke-Hamilton, the heads of UNCTAD’s international trade division.
“The effect of US-China tariffs would be mainly distortionary. US-China bilateral trade will decline and replaced by trade originating in other countries.”
Japan, Mexico and Canada also are each likely to capture more than US$20 billion in trade, UNCTAD said.