Mexico would win with a trade war between the US and China

Mexico will be the country most benefited if the trade war between the United States and China deepens in March, projected the United Nations Conference on Trade and Development (UNCTAD, for its acronym in English).

Mexico will be the country most benefited if the trade war between the United States and China deepens in March , projected the United Nations Conference on Trade and Development (UNCTAD, for its acronym in English).

In relative terms, Mexican external sales would increase 5.9% with the trade war, an indicator in which the following nations with the highest profits would be Vietnam (5%), Australia (4.6%), Pakistan (3.8%) and Brazil (3.8%). percent). Likewise, Mexico would be the most favored in absolute terms, with an increase of its exports of 27,000 million dollars. It would only be surpassed by the European Union (as a 28-nation bloc), with estimated profits of 70 billion dollars.

“For Mexico, it represents a non-negligible share (of profits) of its total exports (around 6%),” UNCTAD said.

On September 17, President Donald Trump announced an increase of 10% tariffs on Chinese productsworth 200 billion dollars, effective as of September 24 (with the initial threat of raising them to 25% on September 1). January 2019), and warned of more tariffs for Chinese products worth $ 267 billion if China took reprisals, which the latter nation finally did.

Subsequently, on September 24, China raised tariffs (by 5 and 10%) on imports from the United States worth 60 billion dollars. So far, the increased tariffs or proposed by Trump of Section 301 add up to 517 billion dollars in imports from China, a level that would affect almost all imports of Chinese products .

The UNCTAD study concludes that of the more than 250,000 million in Chinese exports subject toadditional US tariffs , approximately 82% will be captured by companies in other countries, 12% will be retained by Chinese companies, and only 6% will be captured by American companies.

Similarly, of exports of approximately 110 billion dollars subject to China’s tariffs , about 85% will be captured by companies in other countries, US firms will retain less than 10%, while Chinese companies will retain less than 10%. they will capture around 5 percent. The reason is simple, according to UNCTAD, bilateral tariffs alter global competitiveness for the benefit of companies that operate in countries that are not directly affected by them.

The United States temporarily stopped, until March 1, its intention to increase from 10 to 25% the tariffs to imports originating in China for a value of 200,000 million dollars per year.

Both nations could reach a turning point in their commercial war and for this they have had talks.

Source: El Economista

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