Dhaka, Sunday, 19 May 2019

Asian countries capture diverted exports


Apparel Desk: A new report from the United Nations Conference on Trade and Development (UNCTAD) shows, tariff-fueled trade war between the US and China impacted more than 50 per cent of two nations’ bilateral trade. As a result, a handful of countries, mostly Asian neighbors, have captured a bulk of the diverted exports.

As per UNCTAD, this effect could become more pronounced if the US follows through on the threat to increase tariffs to 25 percent on a range of goods on March 1 from the more narrow 10 percent duties already imposed. UNCTAD estimates, which include the potential March hike, show that most US-China trade affected by the increased tariffs will divert to other countries and not just shift the bilateral balance of trade.

The report said that of the $250 billion of Chinese exports subject to US tariffs, 82 per cent will be taken by firms in third countries, about 12 per cent will be retained by Chinese firms and just about 6 per cent will be kept by US companies.