US car tariffs would have ‘bigger effect’ on global economy than US-China trade war, says WTO economist
- World Trade Organisation chief economist Robert Koopman warns that there would be a ‘big disruptive effect’ on supply chains and on consumers hoping to buy cars
- Direct trade between the US and China accounted for just 3 per cent of global trade in 2017 compared to 8 per cent for the car sector including parts
US tariffs on the car industry would have a “much bigger effect” on the global economy than the trade war between the United States and China, said the World Trade Organisation’s chief economist, Robert Koopman.
Total global trade in 2017 was worth US$22 trillion, with trade between the US and China accounting for just 3 per cent (US$660 billion) compared to 8 per cent (US$1.76 trillion) for the car sector including parts.
The impact of a trade war on cars would be more widely spread than a bilateral trade war between the US and China, Koopman said.
The global car supply chain is long and complex, with many parts are made in China before then being sent to other countries for assembly into finished cars.
And while China is now the biggest car-buying and producing market in the world, most of its vehicles are made for domestic consumption – it is not even in the top 15 of national exporters of finished cars.
Koopman warned that tariffs would cause a “big disruptive effect” on supply chains and on consumers hoping to buy cars.