Trade truce brings temporary relief, but tariffs remain high
The ongoing trade war is expected to result in Chinese export losses amounting to $108 billion (€95 billion) this year, according to analysts from Allianz Trade. Some of these losses—approximately $26 billion (€23 billion)—are anticipated to 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 suspended. A 90-day agreement was reached, during which the USA reduced tariffs on Chinese goods from 103% to 39%, while China lowered tariffs on American products from 140% to 24%.
Analysts from Allianz Trade highlight that these tariffs are still higher than they were before Trump’s second term. They predict that this level of tariffs will be maintained even after the initially set 90-day period concludes.
The continuing trade war is projected to cause Chinese export losses of $108 billion this year. Nonetheless, China is actively adopting measures to cushion the impact. According to a report by economists from Allianz Trade, around 75% of these losses—approximately $82 billion—could be rerouted through alternative Asian ports, while the remaining 25%—about $26 billion—might be offset by expanding market shares in other regions, particularly Europe.
They added that the $108 billion in losses is significantly less than previously estimated before the agreement between China and the USA was reached (earlier estimates suggested $234 billion). However, they stressed that it is still substantial, representing a quarter of Chinese exports to the USA and 0.5% of China's GDP.
Analysts from Allianz anticipate that the sectors likely to be hit the hardest include machinery and equipment, household appliances, textiles, as well as computers and telecommunications devices.
