EU to cash $70bn in from trade war, Brazil to benefit $10bn: UN

The European Union will profit the most from changes in global trade due to the US-China trade war, with Brazil cashing in $10.5 billion annually if the world’s two largest economies expand the trade war, a UN report published this week showed. The study by the United Nations Conference on Trade and Development shows that the EU will benefit from $70 billion worth of increased trade, equivalent to 0.9% of the bloc’s total exports.Of that headline figure, $50 billion will replace Chinese exports to the US, with $20 billion capturing US exports to China.President Trump has warned that if no deal is reached by March 1, the additional tax rates on Chinese goods will increase from 10% to 25% with China to react reciprocally.The UN estimates that of the $250 billion of Chinese exports taxed by the US, 82% will be snatched up by firms in third countries, with 12% to be retained by Chinese firms and just 6% by US companies.Conversely, of the $110 billion of US exports taxed by China, 85% will go to other countries, with US firms holding on to 10%, and Chinese companies only seeing a 5% increase.Brazil, who became China’s number one soybean supplier in 2018 following the trade war, will benefit to the tune of $10.5 billion, equivalent to a 3.8% increase in annual exports and making it the eight largest beneficiary from the trade war.Yet, only 20% of that increase is due to Chinese tariffs on US goods, meaning that the largest benefits for Brazil are to be reaped from additional trade with the US, such as metals and machinery, rather than additional soybean sales to China.