Economy

UN says EU could win big in US-China trade war

UN says EU could win big in US-China trade war

United States companies would capture only 6% of the $250bn of the affected Chinese exports, while Chinese firms would retain 12%, despite the higher cost of trade, the study said. IMF Cuts Global Economic Growth Projections over US-China Trade War. And of the approximately United States dollars 85 billion in U.S. exports that are subject to China's tariffs, only about five per cent of this will be taken up by Chinese firms, according to the UN research.

A senior Trump administration official said that through ongoing talks about the US' 142 trade demands, the number of items Beijing deemed non-negotiable has been sharply reduced, The Wall Street Journal reported on Tuesday.

German automakers Daimler (DDAIF) and BMW (BAMXF), which export high-end vehicles to China from their U.S. plants, said previous year that Chinese tariffs on American-made cars were hurting their profits. US-China Trade War "Most Stupid Thing Ever", Says Alibaba Chief Jack Ma.

However, the study also underscores that even for countries whose exports are set to increase because of the trade sparring, not all the results will be positive.

The talks have centred on addressing USA demands for deep structural changes to China's economic and trade policies, including new protections for US intellectual property, ending forced technology transfers, reining in China's subsidies for state industries and increasing Chinese purchases of USA farm, energy and manufactured products. But because the magnitude and duration of tariffs is unclear, Brazilian producers have been reluctant to make investment decisions that may turn out to be unprofitable if the tariffs are revoked.

Brazilian companies that purchase soybeans, meanwhile, stand to lose out amid inevitable price hikes, it added.

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The study also underlines that while some countries will see a surge in their exports, negative global effects are likely to dominate.

The study also underlines the "common concern" that trade disputes have an unavoidable impact on the "still fragile" global economy, particularly on developing, commodity-rich countries that are dependent on exports.

Another worry is that more countries may join the fray and that protectionist policies could escalate to a global level. One major concern is the risk that trade tensions could spiral into currency wars, making dollar-denominated debt more hard to service. Tariff increases penalize not only the assembler of a product, but also suppliers along the chain.

U.S. Trade Representative Robert Lighthizer told reporters he learned about it only shortly before the meeting with Liu and U.S. officials were initially confused about how large the offer was.

Last year, the U.S. levied tariffs of between 10% and 25% on $250bn worth of Chinese goods.

But the UNCTAD study also warns that the spat could hit East Asian producers the hardest, with a projected $160 billion contraction in the region's exports unless discussions between China and the USA are resolved before the March deadline. March 1, 2019 is the deadline for implementing the measures.