BEIJING/WASHINGTON, D.C.- The trade war between the United States of America and People’s Republic of China has hurt both sides and decreased US imports from Beijing by $35 billion over the first half of this year, the United Nations Conference on Trade and Development (UNCTAD) announced in a report.
“The analysis shows that US tariffs caused a 25% export loss, inflicting a US$35 billion blow to Chinese exports in the US market for tariffed goods in the first half of 2019”, a press release accompanying the report said on Tuesday, according to Sputnik.
US tariffs on China are hurting both countries economies’ and US losses are largely related to higher prices for consumers, the UNCTAD report warned. Taiwan was the largest beneficiary of the trade diversion of US tariffs on China, accounting for additional exports to the United States of almost $4.2 billion in the first half of 2019, the report added.
Mexico’s increase in exports to the United States due to the new tariffs on China is said to be about $3.5 billion, mostly in the agricultural, transport equipment, and electrical machinery sectors, UNCTAD announced. The trade war was initiated by the United States, as the country’s trade deficit with China was measured in hundreds of billions of dollars per year.
The United States’ goods trade deficit with China was the staggering $419.2 billion in 2018, an 11.6% increase ($43.6 billion) over 2017. However, the United States had a services trade surplus of an estimated $41 billion with China in 2018, up 0.8% from 2017. Still, this is more than ten times lower than China’s goods deficit.
The trade war is likely to partially slow down China’s massive economic growth, but not nearly as much as the strategists in Washington, D.C. expect, mostly due to the fact that China is opting for markets elsewhere, especially in Eurasia, Africa and Latin America.
Also, Beijing’s highly successful strides towards eliminating poverty have lead to an enormous increase in the purchasing power of China’s massive internal market of 1.4 billion consumers, which is likely to significantly ameliorate the negative effects of the trade war.