US-China trade war: Tariffs are exacerbating existing trends, leaving few victors

Summary

The trade war between the United States and China began as an attempt by US President Donald Trump to correct what he saw as an unbalanced trading relationship with the second largest economy in the world. However, retaliatory tariffs from China were meted out. Both countries to varying extents, and in different parts of their respective economies, are under pressure due to trade barriers.

Some economic benefits and problems can be attributed to tariffs. For the most part, however, the trade war has exacerbated existing trends. Beyond inflicting some hurt on another economy, the fundamental aims behind the imposition of tariffs have largely been missed.

Key Highlights

- Whilst there have been some short-term successes, the trade war waged against China has had far-reaching consequences for many industries situated in the world’s largest economy.

- Echoing the example of the United States, the impact of the trade war on Chinese commerce is largely an exaggeration of existing trends.

- Neighboring nations to China now stand to gain from companies electing the risks and costs of moving elsewhere are acceptable to reap the rewards of tariff free trade with the United States and China.

Scope

- Examines the impact of the trade war on the United States

- Looks at how China is being impacted by the tariffs

- Assesses whether third-party countries can benefit

- Looks at the most adversely effected

- Asses how business dynamics may change between the US and China

Reasons to buy

- Will either the US or China benefit from trade war?

- Can other countries benefit from the tariff dispute?

- Which industries will suffer the most?

- Will companies continue to leave China?

- How much influence over Chinese tech firms does the US really have?

Table of Contents
Overview 2
Catalyst 2
Summary 2
Trade war with China is yielding more losses than gains for US economy 6
Core aims of tariffs are not being achieved despite healthy headline figures 6
US manufacturing companies are suffering under weight of Chinese tariffs 7
Tariffs exacerbate rising costs even for international brands based in US 8
Agriculture is reacting badly to tariffs, revealing inherent weaknesses in US policy 8
China is suffering losses due to US trade dispute too 10
Tariffs are making existing trends in Chinese textile manufacturing worse 10
Chinese technology companies face major threats in US trade war 11
ZTE example underlines Chinese need for its own supply chain and power held by United States over major players 12
President Trump can exert a great deal of power over Chinese tech firms in wider political battles 13
Asian neighbors to China stand to gain from trade war but face risks 14
Vietnam ideally placed to attract businesses frustrated with new tariff regime 14
Philippines is also predicted to benefit but faces a tougher time doing so than other regional players 15
Asia-Pacific nations are competing hard for companies leaving China following imposition of tariffs 16
Much now rests on results of tariff truce negotiations 17
Conclusions 19
For the most part the Chinese and US trade war provides losses 19
Appendix 20
Sources 20
Further Reading 20
Ask the analyst 21
About MarketLine 21
Disclaimer 21