The world leader in global business intelligence
The Economist Intelligence Unit (The EIU) is the research and analysis division of The Economist Group, the sister company
to The Economist newspaper. Created in 1946, we have over 70 years’ experience in helping businesses, fnancial frms and
governments to understand how the world is changing and how that creates opportunities to be seized and risks to be managed.
Given that many of the issues facing the world have an international (if not global) dimension, The EIU is ideally positioned to be
commentator, interpreter and forecaster on the phenomenon of globalisation as it gathers pace and impact.
EIU subscription services
The world’s leading organisations rely on our subscription services for data, analysis and forecasts to keep them informed about
what is happening around the world. We specialise in:
Country Analysis: Access to regular, detailed country-specifc economic and political forecasts, as well as assessments of
the business and regulatory environments in diferent markets.
Risk Analysis: Our risk services identify actual and potential threats around the world and help our clients understand the
implications for their organisations.
Industry Analysis: Five year forecasts, analysis of key themes and news analysis for six key industries in 60 major
economies. These forecasts are based on the latest data and in-depth analysis of industry trends.
EIU Consulting
EIU Consulting is a bespoke service designed to provide solutions specifc to our customers’ needs. We specialise in these key
sectors:
EIU Consumer: We help consumer-facing companies to enter new markets as well as deliver greater success in current
markets. We work globally, supporting senior management with strategic initiatives, M&A due diligence, demand forecasting
and other issues of fundamental importance to their corporations. Find out more at eiu/consumer
Healthcare: Together with our two specialised consultancies, Bazian and Clearstate, The EIU helps healthcare organisations
build and maintain successful and sustainable businesses across the healthcare ecosystem. Find out more at: eiu/
healthcare
Public Policy: Trusted by the sector’s most infuential stakeholders, our global public policy practice provides evidence-
based research for policy-makers and stakeholders seeking clear and measurable outcomes. Find out more at: eiu/
publicpolicy
The Economist Corporate Network
The Economist Corporate Network (ECN) is The Economist Group’s advisory service for organisational leaders seeking to better
understand the economic and business environments of global markets. Delivering independent, thought-provoking content,
ECN provides clients with the knowledge, insight, and interaction that support better-informed strategies and decisions.
The Network is part of The Economist Intelligence Unit and is led by experts with in-depth understanding of the geographies and
markets they oversee. The Network’s membership-based operations cover Asia-Pacifc, the Middle East, and Africa. Through a
distinctive blend of interactive conferences, specially designed events, C-suite discussions, member briefngs, and high-calibre
research, The Economist Corporate Network delivers a range of macro (global, regional, national, and territorial) as well as
industry-focused analysis on prevailing conditions and forecast trends.
CREATIVE DISRUPTION
ASIA’S WINNERS IN THE US-CHINA TRADE WAR
The Economist Intelligence Unit Limited 20181
Contents
Creative disruption
Asia’s winners in the US-China trade war 2
Tarif targets 3
Information and communications technology products 4
Automotives 6
Apparel and readymade garments 8
A new wave of interest 10
CREATIVE DISRUPTION
ASIA’S WINNERS IN THE US-CHINA TRADE WAR
The Economist Intelligence Unit Limited 20182
Creative disruption
Asia's winners in the US-China trade war
T
he US and China are rapidly discovering how wrong Donald Trump was when he said that trade
wars are good and easy to win. The two countries have so far imposed tarifs covering roughly
US$360bn of merchandise trade between them. A breakdown in negotiations suggests that neither
side is yet seriously looking for an “of ramp” in the dispute. The Economist Intelligence Unit expects
that by early 2019 tarifs will have been introduced on the vast majority of US-China merchandise trade.
The US-China trade war will have a signifcant adverse impact on the world economy. By distorting
global trade fows, the confict will push production to more expensive locations, forcing up prices and
reducing efciency. The end-price of products will be higher than it would have been otherwise, adding
to infation and potentially forcing faster tightening of monetary policy in many markets. Global trade
fows are also set to slow, particularly in the short term, as mounting US-China tensions disrupt existing
supply chains and dampen investor confdence. The greatest impact will of course be felt in the US and
China, but many other economies are likely to experience collateral damage.
Still, there will be winners as well as losers. Tarifs tend to shift trade more than they reduce it and,
as importers in China and the US look for alternative suppliers, new opportunities will open up for
exporters in third-party markets. Some of those benefciaries will be in countries such as Mexico (where
the US-Mexico-Canada Agreement may facilitate auto parts imports to the US) or Europe (whose
agricultural exporters should beneft as US produce becomes more expensive in China). However, the
lion’s share of the gains from the trade war will fall to countries in Asia.
Using our world-leading expertise in economic forecasting and analysis, and leveraging our team of
country and industry analysts across Asia, we have produced a report that examines which countries
in the region will emerge as the key winners from the supply chain shifts caused by the trade war.
We focus in particular on the impact on three important sectors: information and communications
technology (ICT) products; automotives and automotive parts; and apparel and readymade
garments (RMGs).。