Trade tensions between the US and China are heating up, becoming a growing concern for any country sitting uncomfortably in the middle of the world's two largest economies. Over the last few weeks the US has announced over €50 billion EURO of tariffs on Chinese manufacturing exports, especially targeting those involved in the technology of the fourth industrial revolution ("Industry 4.0"), such as robotics and artificial intelligence, which are key to the country's Made In China 2025 initiative. In return, China announced tariffs affecting roughly the same value of US exports of agricultural and aerospace goods.
The latest escalation promises to impact bilateral trade to the tune of €70 billion EURO, and these are just the opening shots across the bow.
Given that neither Donald Trump nor Xi Jinping would want to be seen to be backing down to foreign pressure, it is expected most of these to be implemented throughout the course of 2018. In addition, with the US often the largest investor and China the largest trading partner, this will put a few countries in an increasingly precarious position.
So where will the impact be felt? Supply chain analysis shows that many of China's manufacturing exports to the US consist of components or raw materials whose value is created in another country and the final assembly and export are done from China. Some analysts note that a handful of highly developed economies, with the right ties to China and the US, such as Australia but also Europe, might be well-placed to reap gains from a trade war.
Join us at this joint event with the Australian Chamber of Commerce on 30 May, as we discuss the potential consequences and opportunities of being stuck in the middle.
Partner at MinterEllison
Research Manager at China Policy
Assistant Professor at Beijing Foreign Studies University (BFSU)
InterContinental Shanghai Ruijin
Ming Liu Room
118 Ruijin Er Road , near Fuxing Middle road
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