It will come as no surprise to anyone involved in international trade that the current China / USA trade war is going to result in major changes in the flow of goods, especially as the US market is by far the largest for Chinese companies. As China’s second largest market for its manufactured goods, EU companies are well placed to drive harder bargains with Chinese suppliers who will by now rather keen to find new outlets for the goods so that they can keep their factories in production, especially as only 12% of Chinese output stays in China.

This increase in bargaining power for EU importers is not going to last forever though! Markets tend to quickly re-adjust themselves to changes in trade and this is likely to be no exception. Almost as soon as US 25% duty surcharges were applied, Chinese companies as well as their Far East competitors were making alternative plans.

 

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