EU to cash $70bn in from trade war, Brazil to benefit $10bn: UN<\/h3>\n\n\n\n
The European Union will profit the most from changes in global trade \ndue to the US-China trade war, with Brazil cashing in $10.5 billion \nannually if the world\u2019s two largest economies expand the trade war, a UN\n report published this week showed.<\/p>\n\n\n\n
The study by the United Nations Conference on Trade and Development \nshows that the EU will benefit from $70 billion worth of increased \ntrade, equivalent to 0.9% of the bloc\u2019s total exports.<\/p>\n\n\n\n
Of that headline figure, $50 billion will replace Chinese exports to the US, with $20 billion capturing US exports to China.<\/p>\n\n\n\n
President Trump has warned that if no deal is reached by March 1, the\n additional tax rates on Chinese goods will increase from 10% to 25% \nwith China to react reciprocally.<\/p>\n\n\n\n
The UN estimates that of the $250 billion of Chinese exports taxed by\n the US, 82% will be snatched up by firms in third countries, with 12% \nto be retained by Chinese firms and just 6% by US companies.<\/p>\n\n\n\n
Conversely, of the $110 billion of US exports taxed by China, 85% \nwill go to other countries, with US firms holding on to 10%, and Chinese\n companies only seeing a 5% increase.<\/p>\n\n\n\n
\u201cThe reason is simple: bilateral tariffs alter global competitiveness\n to the advantage of firms operating in countries not directly affected \nby them,\u201d UNCTAD concluded.<\/p>\n\n\n\n
The EU is able to step into the void as it is best placed to offer \nthe goods and services at a competitive rate while having the economic \ncapacity to do so.<\/p>\n\n\n\n
\u201cOur analysis shows that while bilateral tariffs are not very \neffective in protecting domestic firms, they are valid instruments to \nlimit trade from the targeted country,\u201d UNCTAD\u2019s head of international \ntrade division, Pamela Coke-Hamilton, said.<\/p>\n\n\n\n
Brazilian beans<\/strong><\/p>\n\n\n\n
Brazil, who became China\u2019s number one soybean supplier in 2018 \nfollowing the trade war, will benefit to the tune of $10.5 billion, \nequivalent to a 3.8% increase in annual exports and making it the eight \nlargest beneficiary from the trade war.<\/p>\n\n\n\n
Yet, only 20% of that increase is due to Chinese tariffs on US goods,\n meaning that the largest benefits for Brazil are to be reaped from \nadditional trade with the US, such as metals and machinery, rather than \nadditional soybean sales to China.<\/p>\n\n\n\n
While higher cash prices for soybeans were welcomed by Brazilian \nfarmers, industry concerns remain over what will happen when the trade \nwar ends and tariffs imposed on US beans are lifted.<\/p>\n\n\n\n
\u201cBecause the magnitude and duration of tariffs is unclear, Brazilian \nproducers have been reluctant to make investment decisions that may turn\n out to be unprofitable if the tariffs are revoked,\u201d the study said.<\/p>\n\n\n\n
In 2018, Brazil exported 69 million mt of soybeans to China worth \n$27.5 billion, up from $20.3 billion the year before, Brazilian customs \ndata showed.<\/p>\n\n\n\n
Mexico, Japan and Canada were other large beneficiaries, following the EU, and each captured more than $20 billion.<\/p>\n\n\n\n
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