Winners of the First Trade War May Not Be So Victorious
Stuck between the US and China, Southeast Asia’s challenges this time around are much greater.
To the victors of Trump’s first trade war, there may be too few spoils.
Photographer: Linh Pham/BloombergThe often-proclaimed winners of the first trade war have their work cut out. Southeast Asian economies, usually portrayed as beneficiaries of fraying ties between China and the US, have a challenging outlook. The region will have solid performers, if anybody can truly emerge from commercial conflict in reasonable standing, and its share of also-rans. One thing seems depressingly clear: Faith in the relatively unfettered flow of exchange of goods and services has been dealt a heavy blow.
Donald Trump’s latest salvos are broader and more sweeping, targeting Mexico and Canada. But the health of the relationship between the US and China has been viewed within Asia as an important gauge of America's appetite for sprawling supply chains — and where they are best located. The signs aren’t auspicious: The 10% hike in levies on imports from China alone is the biggest single increase under Trump, according to Nomura. Overall, the effective average tariff moved up “modestly” to 2.8% in 2020 from 1.5% in 2016, the firm's economists said in a note on Monday.