See More on Facebook

Economics

Weathering the US/China Trade War Shocks

The world’s two largest economies have been locked in a trade war—with escalating stakes—for months, and there’s no sign the mutual hostilities will end any time soon.


Written by

Updated: October 29, 2018

Over the past few months, the United States has imposed three rounds of tariffs on a variety of Chinese goods totalling upwards of USD 250 billion. China has answered those levies with tariffs of their own, placing restrictions on American goods worth USD 110 billion.

Shock waves from these actions have the potential to affect economies across the globe. What are some of the countries in the region doing to weather the possible storm?

Indonesia

Indonesia’s strategy for coping with the US-China skirmishes is to diversify its portfolio of trading partnerships.

The government has announced that it is seeking to complete 13 new trade agreements before the end of 2019. According to Trade Minister Enggartiasto Lukita, 8 of those are already in the process of negotiation.

One of the agreements closest to being wrapped up is the Indonesia-Australia Comprehensive Economic Partnership Agreement, or IA-CEPA, for which negotiations have already concluded.

Another noteworthy trade agreement in process is the Regional Comprehensive Economic Partnership, a free trade agreement between 16 countries: ASEAN and six Asia Pacific States—China, India, Japan, South Korea, Australia and New Zealand. The agreement represents nearly half—45 percent—of the world’s population.

South Korea

South Korea seems to be readying itself to set out on a similar track. On Tuesday, the country’s top economic policy-maker said that South Korea should seek to broaden its trading channels and seek multi-lateral ties.

“Seeking to actively respond to trade protectionism, [Korea] will take pre-emptive actions to diversify its investment and human interchanges,” said Deputy Prime Minister and Finance Minister Kim Dong-yeon in a meeting of economy-related ministers, according to reporting by The Korea Herald.

The government is also keeping an eye out for possible ramifications should the United States decide to declare Beijing a currency manipulator. The US Department of the Treasury declined to bestow this designation on China last week in its semi-annual report on foreign exchange rates, but said the US would be closely monitoring the yuan in the coming months in the lead-up to the next release of the report in April of next year.

Vietnam

While Vietnamese economic experts are keeping a close watch on the US-China relationship, some in the country are arguing that Hanoi stands to gain from the ongoing trade battles.

Vietnam may have the opportunity to increase its exports in goods like shrimp, wood products, and leather items as China’s trade with the United States dries up. However, that strategy is not without its challenges. Vietnam ranked fifth in terms of trading partners with whom the United States had a trade deficit in 2017 so leaning too hard into exports into the US market could see Vietnam slapped with import tariffs as well, which has the potential to hit the Vietnamese economy hard.



Enjoyed this story? Share it.


Quinn Libson
About the Author: Quinn Libson is an Associate Editor at Asia News Network

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

N. Korea says it sent ultimatum to S. Korea over Mount Kumgang project

Mount Kumgang is a joint economic venture. North Korea sent an ultimatum to South Korea earlier this week that it will unilaterally remove the South-built facilities from its Mount Kumgang resort unless Seoul tears them down on its own, Pyongyang’s official news agency reported Friday. The North’s tough stance suggests little room for inter-Korean negotiations that South Korea has sought in an effort to keep the long-suspended tour project that was considered one of the most tangible symbols of inter-Korean reconciliation and cooperation. North Korean leader Kim Jong-un (Yonhap) “We sent an ultimatum on Nov. 11 that i


By The Korea Herald
November 15, 2019

Economics

China, India doing ‘absolutely nothing’ to clean up

Garbage they drop in sea floats into Los Angeles: Donald Trump. US President Donald Trump at the Economic Club of New York on Tuesday, has said countries like China, India and Russia are doing “absolutely nothing” to clean up their smokestacks and industrial plants and the garbage that they drop in sea floats into Los Angeles. Trump also claimed that he considers himself to be, “in many ways, an environmentalist, believe it or not”. US president said that climate change is a “very complex issue.” “So…I’m very much into climate. But I want the cleanest air on the planet and I want to have – I have to have clean air – water,” Mr Trump said in remarks at the Economic Club of New York. Trump while addressing the audience said that the US withdrew from the “one-sided, horrible, horrible, economically unfair, ”close your businesses down within three


By The Statesman
November 14, 2019

Economics

Continued chaos on Hong Kong roads due to strikes

All schools shut on Thursday to protect students. Hong Kong on Wednesday (Nov 13) faced a third straight day of traffic chaos as protesters continued their strike,  obstructing roads and fighting pitched battles with police across the city as schools cancelled classes. The Education Bureau announced that all schools including kindergarten, primary and secondary as well as special schools will suspend lessons on Thursday (Nov 14) out of safety concerns. The Hong Kong Association of the Heads of Secondary Schools has asked the Education Bureau to suspend school on Friday as well. “In some schools situated under the impact of confrontational events, teachers and students had their lessons amidst the tear gas,


By The Straits Times
November 14, 2019

Economics

Trump again cites questionable numbers related to Korea trade deal

Trump has used the trade deal to bolster his credentials back home. US President Donald Trump again cited questionable numbers on Tuesday as he touted his administration’s renegotiated free trade agreement with South Korea. Trump told the Economic Club of New York that the revised FTA, which took effect early this year, doubled the number of American cars that can be sold in South Korea under US standards and extended American tariffs on Korean pickup trucks by another 20 years to 2041. He then took a swipe at the previous administration of Barack Obama, which negotiated the original agreement. “The deal from the previous admini


By The Korea Herald
November 13, 2019

Economics

Uncertainty persists on US – China trade deal

This despite Trump’s comments that US and China close to trade deal. US President Donald Trump said on Tuesday (Nov 12) that the United States and China are close to a trade deal, but made clear that the prospect of tariffs was still on the table, with a warning that the US would raise tariffs on China if no trade deal was reached. His speech at the Economic Club of New York was closely watched by Wall Street but offered no new details on any signing of a much-touted “Phase One” preliminary trade deal with China. China, said President Trump, was dying to make a deal with their “supply chains cracking very badly” almost two years into the trade war. “We’re the ones deciding whether or not we want t


By The Straits Times
November 13, 2019

Economics

India should have signed up for RCEP

India has decided to put a halt on its joining the largest planned free trade area. Had India not pulled out at the last minute from signing the deal during the 3rd summit of the Regional Comprehensive Economic Partnership (RCEP) in Bangkok on November 4, the RCEP would have been the largest free trade area in the world so far—comprising of 16 Asia Pacific countries that house 3.4 billion people, and constituting one-third of the global gross domestic product (GDP) and 40 percent of global trade. Ten member countries of the Association of Southeast Asian Nations (ASEAN) along with Australia, China, India, Japan, New Zealand and South Korea fo


By The Kathmandu Post
November 13, 2019