Pakistan Among Top 3 Likely Beneficiaries of US-China Trade War
|Source: Nomura Securities|
The two economic rivals have announced a series of tit-for-tat tariffs on imports in recent months with US set to increase tariffs to 25% on a range of Chinese products in January, unless the two sides reach a trade deal.
Nomura research shows the US list affects 3,477 products imported by US from China valued at $270 billion. Product categories affected are in electrical equipment, appliances and components (29%), machinery and mechanical appliances (22.7%) and furniture and related products (11.9%). China’s tariff list covers 4,228 US products with a combined value of $110 billion, and consists of food, beverage and tobacco, and vehicles.
Malaysia will benefit most, in particular from its exports of “electronic integrated circuits, liquefied natural gas and communication apparatus”. “Vehicles with only spark-ignition internal combustion reciprocating piston engines” will help Japan, according to the analysis, while Pakistan’s cotton yarn exports could rise.
If the trade war between the world's top two economies continues for years, there will also be production relocation of industrial units from China to other countries in the region. The biggest likely beneficiaries of it will be Vietnam, Malaysia, Singapore and India. Pakistan is least likely to benefit from it.
New opportunities are likely to open up for several Asian nations, including Pakistan, to increase industrial production and grow exports if the US-China trade war escalates.
Will the US-China trade conflict escalate? Is Pakistan capable of seizing the opportunity to expand its exports? Will Pakistan's recurring balance of payments crises end? Will Pakistan manage to avoid repeated IMF bailouts? Only time will tell.
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