TAIPEI (Taiwan News) – Export-reliant economies such as Taiwan, South Korea, and Japan are likely to be the hardest-hit by the escalating trade war between China and the U.S., according to an economist from Moody’s Analytics.
Steve Cochrane, chief Asia Pacific economist at Moody’s Analytics, told CNBC that apart from serving Chinese consumers, the three countries also have products assembled in China before they are exported to markets like the U.S.
They are highly exposed because of their dependence on the “trade linkages with China” and the fact that they are inextricably intertwined with “both China’s domestic demand and in terms of the broader supply chains”, he was quoted as saying by CNBC.
Tensions mounted between two largest economies last month when the U.S. placed Chinese telecommunications behemoth Huawei on a blacklist, and Taiwan, South Korea, and Japan have suffered the biggest losses. This can be partly attributed to the fact that they are the major exporters of tech components to China, and some companies listed in the three markets supply goods to Huawei, the report said.
Economists suggest that any possible recovery in Taiwanese, Japanese, Korean stock markets will hinge on how things develop in the coming weeks. U.S. President Donald Trump has hinted that he would determine whether or not to impose further tariffs on Chinese goods after the G20 summit to be held in Japan at the end of June.