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The trade war between the United States and China may temporarily turn out well for the countries of the euro zone. For example, Gross Domestic Product (GDP) would increase even slightly, according to De Nederlandsche Bank (DNB) on the basis of its own analysis.
According to DNB, the euro zone can benefit from the fight, provided that the countries of the euro zone do not participate themselves in the conflict.
For example, countries may temporarily benefit from cheaper imports from China and the euro area will also benefit from increased competitiveness and a rising dollar.
The trade fight will also lead to a reduction in jobs in the United States and China, which the euro zone will create more jobs in the short term. With all these benefits, GDP should also increase.
China and the United States are the biggest losers
For China and the United States themselves, the main threat is negative consequences. Thus, according to DNB, free trade, for which the United States has been known for decades and has significantly improved the standard of living, is now halted or even reversed.
According to DNB, global growth is a long-term loss. Growth is down because of US measures. This effect is reinforced by China's reaction. Trade and production could show a significant decline for years.
The Central Bank uses a calculation model to estimate the macroeconomic effects of the trade war and stresses that the results should be interpreted with caution.
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