While US imports from China fell by around 15% year-on-year in the first quarter of the year, Bangladesh, India, Indonesia, Malaysia, South Korea, Taiwan, Thailand and Vietnam saw their exports to America grow by more than 16%.However, the report warns that the rise in tariffs sparked by the Trump administration is contributing to global slowdown in merchandise trade and manufacturing sectors.

US/China tariffs

"The initial round of tariffs imposed by the US government on China imports earlier this year has started to make significant and demonstrable impacts on global trade," said PwC, adding that the drop in Chinese imports had "created opportunities for other regional trading partners".Mike Jakeman, senior economist at PwC UK, said: "Economics can sometimes lag behind politics, but we are now seeing hard economic data of the impact of US-China tensions. This has benefited other economies in the region: if this trend continues it will contribute to faster economic growth in Vietnam, South Korea and Taiwan in particular."Yet, if your goal is to primarily tackle trade imbalances, then bilateral tariffs are an imperfect tool: import substitution can simply re-create the problem elsewhere."So, as a result of Vietnam becoming more competitive than China, the US's trade deficit with Vietnam stood at $13.5 billion in the first quarter, compared to $9.3 billion in the same quarter a year ago."

What's the risk of global recession?

The report also evaluates concerns about the risk of another global recession, as trade tensions impact on business sentiment and demand for exports."Certainly, the outlook for the world's biggest economies is less bright than it was 18 months ago," said Mr Jakeman."In early 2018 we witnessed the fastest and most synchronised growth since before the global financial crisis. Since then, the deepening of the trade conflict between the US and China, a series of stumbles in Europe and further struggles in slow-growing emerging markets have transformed sentiment among businesses and policymakers."However, slower growth in 2019 in each of the crucial markets of the US, China and the eurozone is to be expected. The US benefited from a one-off tax cut in 2018. The Chinese government continues to cool its economy very gradually, while the Eurozone is correcting after a couple of years of above-trend growth in 2016-17."That these three economies have cooled simultaneously has been alarming, but fundamentals remain strong."Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory

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