The intensification of the trade war between the United States and China is expected to affect industry in both countries and cause job losses, but it would not change their total trade balance, a report from the International Monetary Fund (IMF) showed on Wednesday.
The US and China will see "considerable" manufacturing losses as industry capacity shifts to Mexico, Canada and East Asia if tariffs are raised to 25 percent on the flow of all goods between the two countries, the IMF said. in its April Global Economic Outlook report.
This would worsen the tariff battle between two economic giants that has been roiling financial markets since mid-2018.
The US already has 25 percent tariffs on $50 billion of Chinese goods and 10 percent duties on another $200 billion. China retaliated with tariffs on U.S. goods, including important agricultural products.
The countries have been trying to negotiate an agreement to end the dispute. China's electronics and other manufacturing sectors will be hit hard, and the US agriculture sector will see a significant contraction if the trade war intensifies, the IMF report showed.
The group predicts a scenario in which “large sectors in both countries cut significant numbers of jobs”. This will affect about 1 percent of the workforce in the U.S. agricultural and transportation equipment sectors and 5 percent in Chinese manufacturing excluding electronics, such as furniture and jewelry.
