Asia is at last waking up to the threat of a trade war

IT IS hard to argue that the United States and China are not on the brink of a trade war. President Donald Trump is threatening to impose higher tariffs on $450bn of imports from China, with the first tranche, on $34bn of Chinese goods, due to take effect on July 6th. Mr Trump expects China to blink. But what if it doesn’t? Other countries in Asia are only now starting to ask that as they realise how much is at stake.

Nowhere would a rupture of global supply-chains have more impact than in East and South-East Asia, which sit at the heart of them. Intermediate goods account for more than half of Asian countries’ exports, on average, and more than three-fifths of their imports. The region is deeply integrated, in often underappreciated ways, argues Deborah Elms of the Asian Trade Centre, which advises governments and business. South Korean screens and Taiwanese chips famously head to China for assembly into iPhones for American end-users; there are countless similar examples. Many Asian companies,...Continue reading

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