Commercial rates that benefit the other
Photo: Brendan Smialowski Agence France-Presse
The chinese vice premier, Liu He (foreground, left) and us president, Donald Trump, before a meeting with their negotiators, on 31 January last at the White House
American businesses and chinese are the first victims of the war of tariffs, trade between their two countries and which serves, in particular, canadian exporters, according to the UN. The us tariff and trade retaliation from china have mainly had the effect of stopping the exports of the two giants for the benefit of their competitors in other countries, see the united Nations Conference on trade and development (UNCTAD), in a study unveiled Monday.
According to the detailed figures obtained by the Duty, it is thus, in Canada, about $ 5.5 billion of u.s. exports more to China and a little more than $ 16 billion of additional sales in the United States, for a total gain of approximately $ 22 billion in exports.
Equivalent to 3.4 % of canadian exports, the gain is proportionately less than those from Vietnam (+ 5 % exports additional $ 7.5 billion) or Mexico (+ 6%, with $ 27 billion), which emerged as the big winners of the operation. Canada is, however, better, all things considered, the european Union, which consumes 70 billion of this trade diverted, but that only wins as well as an increase of 1 % of its exports.
The result looks any different to the main actors of the drama, notes the UN agency. Instigators of the conflict, the United States of Donald Trump, will not, with their tariffs on 250 billion in imports from China, to replace 6 % of u.s. products, while 12 % of the chinese exports will continue to enter the United States, and 82 % will be “captured” by exporters from other countries.
China will not do better with its trade retaliation. To some 85 billion of u.s. exports subject to counter-sanctions, only 5 % will benefit its own businesses, while 10% will continue to come to the United States, and that 85 % will now be purchased from other foreign countries. What this shows, is that commercial rates are most effective to affect adversely the exports of the target country than to serve its own enterprises, summarized in a press release the head of the division on international trade UNCTAD, Pamela Coke-Hamilton. Thus, ” the bilateral trade between the United States and China will decline and will be replaced by exchanges from other countries “.
Much more than tariffs
The UN agency is careful to limit the impact of the war of tariffs at this one diversion of trade. Although it does not touch, for the moment, only a very small part of world trade, which amounted to 17, 000 billion in 2017, it can contribute to an escalation of protectionism, to a weakening of international rules, and to a growing uncertainty, which threaten all the world’s economic growth.
In its own analyses, the Bank of Canada was awarded in October to the commercial war, the sino-american aggregate economic impact “negative, but few are marked” in Canada. She said, however, also expect another war of rates declared to the United States, in the steel and aluminum this time, as well as all the uncertainty surrounding the us trade policy reduce exports (0.3 %) and corporate investment (0.7 per cent) in the country by 2020.
The United States accuse China of unfair trade practices, particularly regarding the protection of intellectual property, using its Crown corporations and access to its own market. At the end of two days of negotiations between the two countries in Washington last week, the president, Trump stated that “enormous progress” had been made. “A lot of work” remains to be done, however, added to the White House, noting that the 90-day truce, which will end at the end of the month accounted for, ” a firm deadline “.