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The United States and China launched a series of tariffs on July 6, analysts are wary of the downside risks to global growth.
But the impact on asean economies will likely be uneven, according to economists at OCBC Bank. Singapore and Malaysia could be the most exposed in the region, while Indonesia, the Philippines and Vietnam could be less affected.
ASEAN BUSINESS guides you in the analysis of OCBC
Chinks in Asian armor
– defined as US $ 50 billion of US duties on Chinese imports – would have a "Negligible" impact on economic growth for 2018.
If tensions intensify, a tougher trade scenario involving $ 250 billion in tariffs could hurt According to OCBC economists, the growth forecasts of the gross domestic product of the Asian markets are 0.1 to 0.5 percentage points.
The most vulnerable economies have been identified as the most vulnerable to trade with the United States and China. The OCBC team considered Singapore and Malaysia as the most exposed Southeast Asian economies, while Indonesia, the Philippines and Vietnam Given its dependence on With respect to manufacturing and trade, Singapore's economy would probably suffer if trade flows dwindled.
The industries that would be affected include:
- Maritime and Maritime. If China transfers its production abroad, Singapore's transport and logistics center could benefit from increased maritime and maritime activity
- . Some products hit directly by US tariffs – solar cells and modules, washing machines, steel and aluminum – represent a modest 0.1% of exports. But companies that manufacture intermediate goods for Chinese exports could face weaker demand.
- Finance. Increased market volatility can drive capital to safe havens like Singapore, but the Republic is also not immune to the massive outflows that have occurred in Asia and the rest of the world. emerging markets
. The commercial opening of Malaysia, the titling tariffs are expected to increase the costs of raw materials and intermediate goods
The industries that would be affected include:
- The palm oil. Prices and exports could be lifted if palm oil substituted for soybeans, which were the subject of tariffs.
- Chemicals. Malaysia is considered a competitive alternative to China for the United States supply of chemicals.
- Solar panels. With 25% of solar panel imports into the United States from Malaysia, solar panels are sure to hit.
- Electronics. Electrical and electronic products are Malaysia's main exports, and China is a leading trading partner.
Impact on Indonesia
Indonesia makes big trade with China and more than a quarter of Indonesian exports to the Middle Kingdom involve intermediate goods.
Industries that would be affected include:
- Commodities. Coal, rubber and palm oil are the main Indonesian exports. Palm oil prices and exports could benefit if they replace soybeans.
- Steel, aluminum and iron. If the United States hits metal products with import duties, China could dump its own domestic surpluses elsewhere – which would hurt the Indonesian metals industry.
Impact on Vietnam
While a recalibration of trade flows could benefit Vietnam, there is also concern that Chinese companies will turn Vietnam into an export outlet, which could disrupt Vietnam's local industries and make good prices. 19659002] Industries that would be affected include:
- Consumer goods. China could turn to Vietnam's labor-intensive consumer goods industry with the goal of improving market access, diversifying risks and reduce the costs of manpower. Vietnam deals with intermediate goods that are partially assembled in China and then shipped to US customers
Impact on the Philippines
As Philippine growth comes mainly from domestic consumption, it is more likely to raise shoulders. Its high trade exposure to the United States and China, relative to the rest of Asean
Industries that would be affected include:
- Pork. The Philippines could eventually increase its exports to the United States, taking advantage of tariffs on Chinese pork
- . The United States and China are important export and import destinations for the Philippines
Impact on Thailand
Thailand exports mainly primary products, which protects it trade tensions, but its trade surplus with the United States could put it in the sights of more aggressive trade protectionism of the White House.
Industries that would be affected include:
- Fruit. China imposing tariffs on US agricultural products, Thai fruits would be relatively cheaper than US products and their exports should benefit.
- Automotives. Thailand is the largest automobile actor of Asean. It could become a more attractive manufacturing site for global automakers, including Harley-Davidson, thanks to US tariffs on European vehicles
Impact on Myanmar
Myanmar is trading heavily with China.
Industries that would be affected include:
- Cattle. China and Myanmar are working on an agreement to meet China's growing demand for beef with Myanmar's exports. Chinese tariffs on US agricultural products should offer Myanmar another opportunity on the trade front. Chinese companies are more and more eager to set up factories in Myanmar, especially in the Thilawa Special Economic Zone
Impact on Cambodia
The direct impact of ongoing trade tensions is expected to be relatively insignificant, even though the United States, since Cambodia sells mainly clothing and textile products.
Impact on Brunei
As Japan is its main export destination, Brunei has minimal exposure to exports to Washington and Beijing. Only 0.4% of its exports go to the United States and only 2.2% to China, leaving the kingdom largely isolated from trade tensions between the United States and China.
Impact on Laos
The United States is a much smaller market, accounting for only 1.8 percent of Laos exports compared to 28.6 percent in China. As such, the impact of trade tensions on Laos remains minimal.
Industries that would be affected include:
- Electronics. Machinery, transportation equipment and manufactured goods make up the bulk of Laos' exports to the United States – and these industries could potentially flourish as the United States bombs the United States. 39, Chinese electronic tariffs.
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