June 4, 2018

Chart of the Week: Who Stands to Lose from a Trade War?

by Fathom Consulting

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The US administration’s decision to impose tariffs on steel imports from Mexico, Canada and the European Union (EU) has renewed fears of a trade war. The US imports a total of around $30 billion in steel every year, which is a fraction of their total imports. However, the decision to impose tariffs in the name of national security has irked many countries that have traditionally been considered as US security allies. Less than 3% of all US steel imports come from China, while the four largest exporters of steel to the US are the EU (around 21% of total US imports), Canada (18%), South Korea (10%) and Mexico (9%). The EU and China have indicated that they may well retaliate against these tariffs by imposing their own tariffs on a series of US goods. Will they follow through on these threats? As our chart highlights, the EU and China stand to lose more from a reduction in trade with the US than vice versa.

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