Chinese exports face CAD 146B loss despite trade truce
The ongoing trade war is projected to lead to Chinese export losses reaching CAD 146 billion this year, as forecasted by analysts from Allianz Trade in their report. They anticipate that some of these losses—around CAD 35 billion—will be offset by an increase in exports to Europe.
As a result of the agreement between China and the USA, the trade war has been temporarily suspended. A 90-day agreement was established, during which the USA reduced tariffs on Chinese goods from 103% to 39%, and China reduced tariffs on American products from 140% to 24%.
Analysts from Allianz Trade point out that these tariffs remain higher than those before Trump’s second term, and they predict that this tariff level will be maintained even after the previously set 90-day period ends.
The ongoing trade war is expected to result in Chinese export losses reaching CAD 146 billion this year, but measures are being taken to mitigate the effects. We estimate that 75% of these losses (CAD 111 billion) can be redirected through other Asian ports, and 25% (CAD 35 billion) can be compensated by increasing market shares in other regions, mainly in Europe, the economists from Allianz Trade wrote in the report.
They added that CAD 146 billion in losses is significantly less than earlier estimates before the China-USA agreement was reached (previous estimates suggested CAD 318 billion), but they emphasized that it is still substantial as it represents a quarter of Chinese exports to the USA and 0.5% of China's GDP.
"Looking at the sectors that will be most affected, one can point to machinery and equipment, household appliances, textiles, and computers and telecommunications equipment,” predict the analysts from Allianz.
