Philippines among the gainers in US-China trade war — Nomura

MANILA, Philippines — The Philippines could benefit from the escalating US-China tariff battle, as the Southeast Asian country is likely to be among the recipients of trade and investment opportunities as the world’s two largest economies divert imports away from each other to other nations, a global bank said.

In a report sent to reporters Tuesday, Japan-based Nomura said the Philippines could gain 0.1% of its gross domestic product from the US-China trade diversion, adding that the country could capitalize on stronger American demand for typewriter parts and office machines.

Other Philippine products “experiencing the largest increase” in US imports amid the still unresolved tariff wars are prepared unrecorded media for sound, travel goods, handbags and wallets, among others, Nomura said.

Meanwhile, Chinese demand for precious metal ores and concentrates (excluding silver) from the Philippines have surged since the tit-for-tat tariff war began, Nomura also reported.

Overall, Vietnam is by far the largest beneficiary, gaining 7.9% of GDP from trade diversion, followed by Taiwan (2.1%), Chile (1.5%), Malaysia (1.3%) and Argentina (1.2%).

“US import substitution has benefitted Vietnam, Taiwan and Korea in electronics products; Malaysia in semiconductors; and Korea and Mexico in motor vehicle parts,” Nomura said,

“China’s import substitution has led to beneficiaries in copper (Chile), soybeans (Argentina, Brazil, Chile and Canada); gold (Singapore, Hong Kong and South Africa); natural gas (Malaysia, Australia); and aircraft (France and Germany),” it added.

Since US President Donald Trump fired the first shot, China and the US have deployed tit-for-tat tariffs on two-way trade worth hundreds of billions of dollars.

The dispute has worsened in recent weeks, with the US blacklisting Chinese tech giant Huawei over national security concerns, and Beijing threatening to unveil its own list of "unreliable" foreign companies.

There are hopes that Trump and Chinese President Xi Jinping will meet at the G20 summit this month to jump-start stalled negotiations.

Both the US and China are major trading partners of the Philippines.

Last March, Philippine exports to the US contracted 3.1% while outbound shipments to China slipped 2.2%, government data showed.

Imports from China—the Philippines’ biggest supplier of imported goods with 21.4% share to total bills—reached $1.92 billion in March, up 50.2% year-on-year from $1.28 billion. On the other hand, imports from US rose 12.2% during the month. — with a report from AFP