GENEVA: India gained about $755 million in additional exports, mainly
of chemicals, metals and ore, to the US in the first half of 2019 due to
the trade diversion effects of Washington's tariff war with China, a
study by the UN trade and investment body has said.
The study, Trade and trade diversion effects of United States tariffs
on China, shows that the ongoing US-China trade war has resulted in a
sharp decline in bilateral trade, higher prices for consumers and trade
diversion effects - increased imports from countries not directly
involved in the trade war.
The study puts the trade diversion effects of the US-China tariff war
for the first half of 2019 at about $21 billion, implying that the
amount of net trade losses corresponds to about $14 billion. The US
tariffs on China have made other players more competitive in the US
market and led to a trade diversion effect. These trade diversion
effects have brought substantial benefits for Taiwan (province of
China), Mexico and the European Union.
"Trade diversion benefits to Korea, Canada and India were smaller but
still substantial, ranging from $0.9 billion to $1.5 billion," it said.
The remainder of the benefits were largely to the advantage of other
South East Asian countries.
The US tariffs on China resulted in India gaining $755 million in
additional exports to the US in the first half of 2019 by selling more
chemicals ($243 million), metals and ore ($181 million), electrical
machinery ($83 million) and various machinery ($68 million) as well as
increased exports in areas such as agri-food, furniture, office
machinery, precision instruments, textiles and apparel and transport
equipment, UNCTAD said.
The analysis shows that US tariffs caused a 25 per cent export loss,
inflicting a $35 billion blow to Chinese exports in the US market for
tariffed goods in the first half of 2019. This figure also shows the
competitiveness of Chinese firms which, despite the substantial tariffs,
maintained 75 per cent of their exports to the US.
