Companies diversified by China - Trump's trade war threatens them

Companies diversified by China - Trump's trade war threatens them

for Tim HSU, who mainly sells modern lamps and ceiling lights to American customers, the historical announcement of US President Donald Trump has messed up his carefully drawn up plans.

The decision for investments in Cambodia

Surprising customs announcement

But the announcement of an unexpectedly high customs to all US imports from Cambodia, the highest sentence in Asia and the second highest worldwide, has changed everything. "If customs of 49 % remains unchanged, we will deduct our investments from Cambodia," HSU told CNN.

uncertain future for companies

At the moment, his next step remains uncertain, as questions are open whether the high customs remains. It is relatively easy for him to withdraw from Cambodia because the investment is still at an early stage. But for many other companies with long -established factories that employ thousands of workers in the country, the customs news is nothing less than devastating.

episodes for other Asian countries

Numerous countries in Southeast Asia and South Asia - including Laos, Vietnam, Myanmar and Sri Lanka - were affected by tariffs over 40 %, which could heavily burden their export -dependent and extremely vulnerable economies. For over 15 years they had benefited from global investors who were looking for alternatives to China's efficient supply chains that have become increasingly expensive.

growth factors and challenges

The tensions between the USA and China as well as the Covid 19 pandemic in recent years have accelerated this trend. Labor -intensive industries - from clothing to footwear to the production and assembly of electronics in the lower price segment - have become an important engine of the economic growth of these countries.

The worst effects in Cambodia

Ahmed Albayrak, a research employee of the Lowy Institute’s Indo-Pacific Development Center, based in Sydney, explains that Trump's Zölle Cambodia, a heavyweight of clothing production, will be the strongest, since the country exports a significant part of its clothing and shoe products to the USA. According to the calculated data from the Cambodian Ministry of Economic Affairs and Finance, over 37 % of exports are eliminated to the United States, which makes the country particularly vulnerable.

affected workers

The exports of clothing and footwear made up over 43 % of the country's exports last year. This will hit the huge number of textile workers, many of which have to do with a monthly minimum wage of $ 200. Last year, around one million people worked in the clothing, textile and shoe industry in the 17 million people, with about 75 % of these workers being women.

relocation of international brands

Great international brands such as Nike and Adidas have shifted their production lines to Southeast Asia in recent years to reduce their dependence on China. "The negative effects of this customs on the broader economy will be enormous," warned Albayrak and referred to shrinking production and job losses.

tariffs in other Southeast Asian countries

Among the other countries, which are heavily affected in Southeast Asia, are Laos with 48 %, Vietnam with 46 %and Myanmar with 44 %. Laos and Myanmar are also among the poorest countries of Asia.

Vietnam as an affected export country

Vietnam, another center of the clothing industry, exported about a third of his entire exports to the United States. Albayrak said: "Exports to the USA are a major part of the growth story Vietnam. If they are hindered by tariffs, the country's growth forecast will suffer."

Indonesia and other countries on the list

Indonesia is less affected. Despite a customs of 32 %, only 10 % of the country's exports go to the USA. Another poor country that was hit by high tariffs is Myanmar, which was affected by a devastating earthquake last week, in which more than 3000 people were killed. The disaster occurred while the country was in a four -year civil war that was triggered by a military coup.

post-crisis situations in South Asia

In South Asia, Trump raised the highest tariffs on Sri Lanka, which was occupied by a 44 % inch, while trying to recover from an economic crisis that contributed to the defeat of his government. The country is now dependent on a bailout of the International Monetary Fund (IMF).

Bangladesh under pressure

Bangladesh, also a center of the clothing industry, sees 37 % tariffs towards his exports to the United States, which the economy should burden. From a historical point of view, the United States was an important market for Bangladeshic clothing, and the new tariffs could endanger the competitiveness of the industry and threaten jobs in this sector. "Both Bangladesh and Sri Lanka would be severely affected because access to the USA, its largest export market, would be restricted," explains Biswajit Dhar, a respected professor at the Council for Social Development in New Delhi