Truce or confrontation .. Which is better in the trade war between America and China?

According to a Bloomberg report, some countries have benefited from the crisis between the United States and China. "What if there is a truce for trade war between the two sides?"

Writer Daniel Moss said that resolving this crisis would threaten the economic prosperity of some countries, pointing out that the truce would lead to losers.

The economic conflict between the United States and China is still tough, and the decades-long trade relationship is tearing apart, reflecting the global economic slowdown and shaking corporate and investor positions.

The writer asks: Can not return to the way things were? Where the confrontation looks endless.

Targeted investments
But this view will exclude the relative winners of the conflict, especially those in Southeast Asia that have attracted investments directed at China in another way.

He says Google is taking steps to shift the production of its Pixel smartphone from China to Vietnam, and shipments to US ports from Asia, excluding China, jumped in the first six months of the year, while imports from the mainland declined.

Commercial peace or the cessation of hostilities in this context would jeopardize these trade operations.

Scenarios
The writer also points out that the International Monetary Fund in its annual review of the Chinese economy this month to some scenarios that would reach a trade agreement.

Such an agreement, he says, is likely to aim to zero the trade balance between countries, and the move would significantly reduce the US $ 419 billion US trade deficit with China.

The IMF-specific scenario would result in China buying more US cars, machinery and electronics. However, it turns out that Beijing is unlikely to stimulate its economy so much that it can absorb enough US goods without cutting them elsewhere.

The IMF believes that South Korea and Singapore, which consider China as their largest trading partner, would lose exports by about 2.1 percent and 3.8 percent of GDP under the deal, respectively.

local production
Australian metal exports will also suffer, as will electronics sales from Southeast Asian countries such as Malaysia.

He says the IMF has stated that the impact of distortions a trade deal could have on global GDP is likely to be negative, and to be reflected in the benefits of a policy of lower uncertainty, the withdrawal of high tariffs, and any new reforms.

While the biggest shortfalls will be felt in Asia, the imbalance will not be confined to the region, but the purchase of more US planes could affect France in particular, because Airbus is the main competitor of Boeing.

This does not mean that the IMF - the champion of the free-market doctrine - has become a proponent of trade warfare, but rather that the IMF prefers a charter that does not rely on quotas or increased procurement, although the concrete alternative is unclear.

Forces and Economy
Asia might have been better off if the trade war had not started, but it risks ignoring some of the forces that shaped the world economy long before US President Donald Trump was elected.

These include the sustainability of record expansion in the United States, the sunset of China's double-digit growth and the aging population in Europe and North Asia.

He says that as the economic damage caused by the trade war grows, it is worth considering whether peace will necessarily be the tranquility that some expect in January 2021.

Although the Treaty of Versailles (which formally brought down the facts of World War I) was better than the trenches, it had some serious flaws.