• Global trade tensions continue to escalate, with some fearing a trade war between the US and China.
  • China, Mexico, and Canada are likely to be directly affected by any trade conflict, according to research by Citi.
  • South Africa is among the countries that may be least affected.
  • Thailand, Taiwan, and Switzerland are among nations that could be damaged by rising protectionism.


As global trade tensions continue to rise, economists continue to worry about what a full-scale trade war would mean for the global economy and for individual economies around the world.

US President Donald Trump is leading the protectionist surge, and his trade-based aggression so far has been focused largely on China, Mexico, and Canada. On Tuesday, he announced plans for tariffs on roughly $50 billion (R595 billion) worth of Chinese products, including raw materials, construction machinery, agricultural equipment, electronics, medical devices, and consumer goods.

China quickly hit back with plans to impose tariffs on more than 100 American products with a combined trading value of over $50 billion.

It remains unclear whether the tariffs will ever actually be imposed, but if they are, it would most likely have a major impact on the affected industries that could spill over to other parts of both economies. And the effects of increased import and export costs could even spread to other countries.

Quantifying the exact impacts on a country-by-country basis is difficult, but analysts at Citi have had a go, using individual country data on the percentage of gross domestic product that comes from exports to the US as well as stock market exposure to the US.

You can see the chart below mapping the likely exposure:

South Africa is one of the least affected countries according to the chart: it has low economic exposure to the US, as well as low stock market sales exposure to North America. According to the chart, SA exports to US make up less than 2% of GDP, while the exposure of JSE-listed shares to the US economy is among the lowest in the world.

Read also: SA fruit and wine exports will benefit from a US-China trade war. But it will be bad for everything else

"The direct economic impact of recently announced tariffs is small. But a further rise in protectionism is a downside risk for growth and upside risk for inflation," a team of Citi analysts led by Robert Buckland wrote.

"Export-oriented (especially to the US) stock markets (Korea, Taiwan) and sectors (Industrials, Autos, Tech) are most exposed."

While Citi has worries about growing trade tensions, it does not believe that a full-scale trade war is likely to materialize.

"Citi economists' base case remains for moderate tightening of trade and investment rules," the analysts wrote, "not a full blown trade-war."

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