1.

On China:
- $35 billion Chinese export losses in the US market (in the first half of 2019), Chinese
exporters may have started to bear part of the costs of the tariffs by lowering export
prices

The hardest-hit Chinese manufacturing sector has been computers and other office
machinery, and communications equipment, where exports from China have declined
by $15 billion.
Other areas that have “dropped substantially” include chemicals, furniture, precision
instruments and electrical machinery, the UNCTAD report shows.
It nonetheless underscored the resilience of Chinese firms, which maintained 75 per
cent of their exports to the US, despite the “substantial” tariffs imposed.

Link: https://news.un.org/en/story/2019/11/1050661

- Growth slump

Major banks including Bank of America, Morgan Stanley and UBS forecast that in
the worst case scenario, China's economic growth might drop below 6% for the
first time in 3 decades.

A Bloomberg News survey predicted that Trump's tariffs on an additional $ 200

billion of Chinese goods last week would cause the country's economic growth to
fall by 0.3 percentage points this year. In the event that the US imposes tariffs on all
Chinese goods from the end of June as Mr. Trump threatens, China will lose 0.6
percentage points of economic growth.

According to Citigroup, Trump's tariffs on Chinese goods so far will cost China 4.4
million jobs. The figure will be even greater if the 25% punishment tax is imposed on
all Chinese goods.
 Right before the latest escalation of conflicts, China's economy had many bad signals.
Statistics released on Wednesday show growth in the world's second-largest economy
lost momentum in April, before President Donald Trump raised tariffs on Chinese
goods.

Link: http://vneconomy.vn/kich-ban-nao-te-nhat-cho-trung-quoc-trong-chien-tranh-thuong-
mai-voi-my-2019051710433181.htm

- Increse of debt

To balance the economy, China may have to launch stimulus measures through
increasing public spending. However, this is a quite risky direction considering that
the debt in the Chinese economy is currently at 300% of the gross domestic
product (GDP), although Beijing has had a debt reduction campaign lasting 2 years.

"The long-term losses are huge," said China economist Larry Hu of Macquarie
Securities.

According to a report by Societe Generale, Mr. Trump's tariffs reveal that the balance
between short-term growth and China's debt sustainability is very precarious.
Once China's debt increases, worries about the risk of financial system will be
blown up again.

"China's economic prospects are very gloomy. The stock market may adjust more
deeply, even to lose all gains from the beginning of the year ... The Chinese yuan
may drop further," said economist Chen Long of Gavekal Dragonomics said.

Link: http://vneconomy.vn/kich-ban-nao-te-nhat-cho-trung-quoc-trong-chien-tranh-thuong-
mai-voi-my-2019051710433181.htm

- Departure of factories

Analysts are also assessing the damage to China's role as the center of the world's
supply chain, as tariffs cause manufacturers to move from China to other countries.
The restrictions that the Trump administration has recently imposed on Chinese
telecommunications equipment maker Huawei show the risk of economic restraint
that Beijing faces.

To date, Mr. Trump's tariffs on Chinese goods have begun a profound, non-reversible
shift in global supply chains. The shift could accelerate businesses to withdraw
factories from China in the context that they already had difficulty because of rising
labor costs and other costs in the country.

On Thursday, Japanese office equipment maker Ricoh announced it would shift part
of its production from China to Thailand to avoid risks of trade war. Taiwan's Kenda
Rubeer Industrial also plans to invest in Vietnam for the same reason. Many major
consumer brands such as Samsonite, Macy’s and Fossil all said they continued to shift
production or outsource out of China.
 According to chief economist Zhuang Bo of TS Lombard, restrictions on Chinese
investment in the United States, especially in technology fields, threaten to delay
technology transfer and water know-how. In addition, thus slowing China's rise in
the value chain.

Worse, some experts say Trump could impose import taxes or ban export to China of
key technology components, especially semiconductor devices. Such an action could
"strangle" China's economy.

Michael Every, Hong Kong's Rabobank head of financial markets, commented that an
economic war with the US would make China miserable. "China will be cut off from
the US market, ideas, technology and the US dollar for a very long time before it
can be replaced," Mr. Every said.

Link: http://vneconomy.vn/kich-ban-nao-te-nhat-cho-trung-quoc-trong-chien-tranh-thuong-
mai-voi-my-2019051710433181.htm

- Decrese of GDP

China's economic growth is slowing down, even using official figures. Most
analysts conclude that China's GDP growth has slowed down much — for example,
GDP growth in the second quarter of this year was nearly 3% compared to a forecast
of 6.2%. China's exports have slowed down while real retail sales in the first half
increased by 6.7%, the weakest since 2011. Investment in China's fixed assets into
production increased by only 3.0 % compared to the growth rate of over 30% in the
period 2010-2011. The Chinese economy is struggling because industrial jobs fell at
the fastest pace since 2009. In the second quarter, nearly $ 300 billion stimulated
through tax cuts and fee cuts by the Chinese government could not Improve
business confidence. A recent survey showed that very few entrepreneurs believed
that their activity would increase next year.

Link: https://www.bbc.com/vietnamese/business-49544949

- Decline of The Chinese Yuan

Link: https://www.investopedia.com/trading/chinese-devaluation-yuan/

For China, the devaluation of the renminbi may push Chinese people to send money
abroad, as happened in 2015-2016. Another problem would be China's debt. The yuan
devaluation will make it difficult for Chinese companies that have borrowed dollars in
dollars, especially in the real estate sector, because they have to pay debts in dollars
while the money comes in the yuan. Right before the depreciation, the total debt as a
percentage of GDP also increased from 298% at the end of 2018 to 304% at the
end of the first quarter of this year.

Link: https://www.groupdiscussionideas.com/us-china-trade-war-impact-on-usa-china-other-
countries/?fbclid=IwAR1WSWFbvMf5sLEnO8RortT_b0_7BhrzSk8t7SkWGfsB6Crk8-
d3rZupfiY

- Technology litigation

China has a rule that foreign companies that operates in China must share their
technology with Chinese companies. From that, Chinese companies are violating
patents and manufacturing the similar products for cheaper prices. But US is
highlighting this issue these days so several countries including Japan, South Korea
suffered patent and trademark violations by China and many more countries may join
this fight and thereby China may face pressure from WTO.

Link: https://www.groupdiscussionideas.com/us-china-trade-war-impact-on-usa-china-other-
countries/?fbclid=IwAR1WSWFbvMf5sLEnO8RortT_b0_7BhrzSk8t7SkWGfsB6Crk8-
d3rZupfiY
 2. On America

- Reverse of US tax policy on China

When the United States imposes tariffs on Chinese goods, it is likely that the US
economy will be vulnerable and buy Chinese goods before September 24, 2018, to
anticipate a rise in taxes, causing the price of Chinese goods to rise. and also with
other commercial costs also increased due to increased demand such as
transportation, insurance, logistics,..

Link: http://www.trungtamwto.vn/upload/files/an-pham/258-tai-lieu-tham-khao/5.%20Chien
%20tranh%20thuong%20mai%20My%20Trung%20va%20mot%20so%20tac%20dong
%20du%20doan.pdf

- Shortage of materials

Currently, most Chinese products are subject to import tax on the US as input for US
businesses. As a result, US industries using products invested from China will also
face difficulties when supplies are lower and prices rise, thereby producing costs
and goods prices on the US market. possibility increased.

Link: http://www.trungtamwto.vn/upload/files/an-pham/258-tai-lieu-tham-khao/5.%20Chien
%20tranh%20thuong%20mai%20My%20Trung%20va%20mot%20so%20tac%20dong
%20du%20doan.pdf

- Directly impact on US consumers and slowing down the growth

The price of US domestic consumer goods increases, US consumers will be affected

and American multinational companies with or without branches in China will also
have difficulty accessing or expanding their jobs trading on the world's largest
market. That, in contrast, will slow the momentum of trade and investment
development of the US economy.
Link: https://markets.businessinsider.com/news/stocks/pantheon-macroeconomics-charts-
show-trump-trade-war-impact-on-us-economy-2019-9-1028531230?fbclid=iwar09gzkfzf-
ezfpoxpb-z4kd6hetst6z6trnsm8harxnaul7v6zvg1jdmpw#smaller-businesses-aren-t-investing-
in-the-future-because-of-uncertainty-3

Link: http://www.trungtamwto.vn/upload/files/an-pham/258-tai-lieu-tham-khao/5.%20Chien
%20tranh%20thuong%20mai%20My%20Trung%20va%20mot%20so%20tac%20dong
%20du%20doan.pdf

- Loss on export

A number of US exports with a large market of China suffered heavy losses.

For example:

 American farmers are the beneficiaries in Soya exports to China. As China is also
toughening its rules against US, Soya farmers of US will be at loss.
Link: https://www.cnbc.com/2019/09/18/what-us-china-trade-war-means-for-imports-
exports-and-soybeans.html

 China buys Boeing commercial Airplanes from US. If it starts buying them from
Europe instead of US, it will be huge loss to Aircraft manufacturers of the United
States.
Link: https://marketrealist.com/2019/08/trade-war-boeing-has-a-lot-at-stake/

- Competition on goods

If China devalues its currency, Chinese goods will become much cheaper and thereby give a
tougher competition to US goods.

Link: https://www.nytimes.com/2019/08/05/business/economy/us-china-yuan-renminbi-
trump.html

- Jobs loss

If China increases restrictions on American goods, there will be more job losses in
US.
Link: https://www.bbc.com/news/business-44728166

- Slow GDP growth

 “Economic growth averaged a solid 2.5% in the first half of this year, better than the
2.0% average in the second half of last year." But the economics research firm said
that this comes with a warning, that tariffs could depress real incomes and exports
could "plunge."

Link: https://markets.businessinsider.com/news/stocks/pantheon-macroeconomics-charts-
show-trump-trade-war-impact-on-us-economy-2019-9-1028531230?fbclid=iwar09gzkfzf-
ezfpoxpb-z4kd6hetst6z6trnsm8harxnaul7v6zvg1jdmpw#gdp-growth-is-slowing-but-it-doesn-
t-look-like-recession-is-likely-1