UN Sees U.S.-China Trade War Hurting Both Nations’ Economies

The UN just weighed in on who’s winning the trade war between the U.S. and China. Neither one.

Ariana News Agency- 

“The U.S. tariffs on China are economically hurting both countries,” according to the report, which tries to measure the extent to which higher import taxes are causing a decline in trade between the world’s two largest economies.

U.S. tariffs on Chinese goods have led to a more than 25% drop in the imports of those goods during the first half of the year, according to a new analysis by the United Nations Conference on Trade and Development. The UN says that actually “shows the competitiveness of Chinese firms, which despite the substantial tariffs, were still able to maintain 75% of their exports to the U.S.”

Meanwhile, American imports of Chinese products that didn’t get the new tariffs stayed relatively stable and even increased in the second quarter of this year — probably the result of front-loading.

The paper also calculates that President Donald Trump’s tariffs diverted trade amounting to about $21 billion for the first half of 2019, bringing “substantial benefits” to a handful of non-combatants:

Taiwan’s shipments to the U.S. rose almost $4.2 billion, which much of the increase tied to higher demand for office and communications equipment. Mexico’s exports to the U.S. increased $3.5 billion, spurred by demand for food, transport equipment and electrical machinery. The European Union’s exports gained $2.7 billion, largely due to demand for machinery. Vietnam’s rose by $2.6 billion, concentrated in communications equipment and furniture.

The hardest hit product category is office machinery, imports of which have plunged 65%, according to the UN. Agriculture and food, communication equipment and precision instruments fell by more than 30%.

But the UN can’t definitively answer the bigger question for politicians in Washington: What’s been the effect on U.S. consumer prices? The analysis “finds implicit evidence that the cost of the tariffs has been generally passed down to U.S. consumers. However, it also finds some indication that Chinese firms may have only recently started to react to tariffs by reducing their export prices, thus absorbing part of the cost of the tariffs.”

Charting the Trade War

Confidence among euro-area industry executives is at the lowest since 2009 when it comes to exports in the months ahead, according to the European Commission. It’s the latest sign that the regions’s already-battered industrial sector has taken an additional hit from the looming threat of new U.S. tariffs and the lingering uncertainty over U.S.-China trade tensions.

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