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Trading places: Why southeast Asia could benefit from US-China spat

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3 Apr 2019

Trading places: Why southeast Asia could benefit from US-China spat

US President Donald Trump’s protectionist policies have drawn criticism from government officials, investors and corporate executives across the world. But they are winning support in some unlikely places. As Indonesian Vice-President Jusuf Kalla told Bloomberg in early 2019: “Ongoing trade war is quite good.”

Trade tensions might seem like bad news for the open economies of southeast Asia, which have benefited from improved global trade flows over the past few decades. Higher tariffs have disrupted supply chains and threatened the economic resilience of China, the major trading partner of many countries in the region.

But the trade conflict has also brought some benefits. As Trump’s tariffs hit Chinese exports to the US, companies in the engineering, textiles and technology industries have been busy bringing forward plans to move production out of China to neighbouring countries to avoid getting caught in the crossfire. Echoing Indonesia’s government, Vietnamese Prime Minister Nguyen Xuan Phuc called on his nation to “grab the opportunity” to win more foreign investment.

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