US economy

UN forecasts trade war to hammer Asia-Pacific export growth


The US-China trade war will cause Asia-Pacific trade to slow in 2019, cutting the growth of exports to 2.3 per cent compared to the nearly 4 per cent by which they grew 2018, the UN said on Wednesday in a report calculating the costs of escalating trade tensions between the world’s two biggest economies.

The report, published by the United Nations Economic and Social Commission for Asia and the Pacific, said that Asia, the world’s largest trading region, would see a net loss of 2.7m jobs due to the trade war with unskilled workers – often women – shouldering the worst of the impact.

The Asia-Pacific Trade and Investment Report said that foreign direct investment into the region would also “continue in their downward trend” in 2019, following a 4 per cent drop in 2018. 

The UN said that global trade “decelerated significantly” in the second half of this year, and that tariff hikes that had already taken place were expected to cut global GDP by $150bn and GDP in Asia by a little over $40bn next year if they remained in place. 

The report also calculated the likely cost of what the UN called “a full-blown trade war”. 

“If the tariff war further escalates in 2019 and investor and consumer confidence drops, global GDP could ultimately be cut by nearly $400bn, also driving regional GDP down by $117bn”, its authors said. 

In the event of a further escalation of the tariff war and a drop in investor confidence, almost 9m people could be put out of work in the Asia-Pacific region. 

Asia-Pacific countries accounted for 38.5 per cent of global merchandise exports and 25 per cent of global imports in 2017, and drew in 39 per cent of global foreign direct investment, according to the UN.



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