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US-China Trade War: Countries most vulnerable to the impending fallout

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Just like every war in the history of mankind, there are no winners – only casualties. Both sides suffer from the consequences and the most vulnerable ones are often left to deal with the aftermath. The same is true with the on-going US-China Trade War, that according to experts like LOM Financial, the clash between these two economic powerhouses could cause ripples to its neighbors and other export-oriented countries.

The fallout from the ongoing trade war between the US and China is finally making its presence felt especially on Asian economies. South Korea, Malaysia, and Taiwan’s respective GPDs rely on exporting goods and services to China. The same goods are used in the Chinese manufacturing industry to produce products, such as automobiles and electronics that are then shipped to the United States.

The rising uncertainty and instability between the trade relationship of US and China can dramatically disrupt the global supply chain production. According to a simulation done by the Bank of England, the developing rift could hit up the global GDP by 2.5% over a period of three years, with the economy of the UK suffering from an overall 2% hit to growth.

Economists recently released a new model that revealed the top countries that will be most affected by the ongoing trade war. The ranking was based on how they are linked on the global value chain as well as how much their economies depend on the entire trading network.

Luxembourg, one of the most export-oriented economies in the world is largely dependent on trade – and that’s why it tops the ranking for the most vulnerable economies to the fallout. Taiwan, Slovak Republic, and Hungary could also suffer greatly from the trade war’s ongoing tariff impositions.