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  • 2 Years of US-China Trade Dispute, Asian Countries Smile While China Cry
    2020-10-21 hit 755

    2 Years of US-China Trade Dispute, Asian Countries Smile While China Cry


    - KITA analyzed two years of the United States' additional tariffs on Chinese products... China's market share sharply declined while South Korea recorded the third highest market share growth in Asia -  

     

    Since the United States started to impose additional tariffs and sanctions on Chinese-made products in July 2018, companies have been significantly restructuring their global supply chain in the United States' import market.

     

    According to the report titled “Changes in the US import market share after the US trade sanctions against China (additional tariffs) and implications,” issued by the Institute for International Trade (President: Choi Yong-min) of the Korea International Trade Association on October 22nd, the proportion of Chinese-made imports of all US sanctioned items against China fell 4.04%p from 17.25 percent in the first half of 2018 to 13.21 percent in the first six months of this year.

     

    During the same period, Asian countries such as Vietnam (+1.30%p), Taiwan (+1.04%p), South Korea (+0.87%p), Singapore (+0.54%p), and Thailand (0.52%p) increased their market shares in contrast to China. In particular, the market share of the ten ASEAN countries rose by 3.09%p from 7.65% to 10.74%, displaying significant upward trends.

     

    It was found that South Korea, in particular, benefited from the sanctions, centering on its export of intermediate goods. South Korea's share in the intermediate goods sector in the US import market of sanctioned items rose 1.16%p from 4.13 percent in the first half of 2018 to 5.29 percent in the first half of this year, recording the highest increase compared to its competitors such as Germany, Japan, Taiwan, and Vietnam.

     

    Among the items that the United States imposed sanctions on, the Chinese goods that suffered the most were electric and electronic products, such as industrial electronics, semiconductors, and home appliances, machinery, and household goods. In particular, the market share of Chinese-made electric and electronic products decreased 14.11%p in two years from 35.3 percent in the first half of 2018 to 15.7% in the same period of this year. On the other hand, the effects of sanctions on agricultural, livestock, and fishery products and non-ferrous metal product were insignificant.

     

    The report stated, “The rapid change in the structure of the US import market over the last two years is that after the United States imposed sanctions against China, companies started to diversify their global supply chain outside of China in order to avoid the risk of disputes between the US and China,” and anticipated, “With the recent spread of COVID-19, the trend of supply chain diversification will continue for some time.”

     

    Jung Hye-sun, a senior researcher at KITA, said, “After the United States and China began the trade war, the global supply chain of major countries surrounding the United States, the world's largest market, is dramatically changing,” and stressed, “In order to maximize export opportunities amid the changing supply chain order, it is necessary to strengthen the foundation for cooperation with countries emerging as new production bases.” 


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