PH vulnerable to US-China trade war: analyst

ABS-CBN News

Posted at Jul 09 2018 10:23 PM

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MANILA - The trade spat between the United States and China is still "relatively limited" right now but could get much worse, with the Philippines vulnerable to its effects, an analyst said on Monday. 

The world's largest and second largest economies have so far shown a lot of brinkmanship but the effects have so far been minor, said Simon Rabinovitch, Asia economics editor at The Economist. 

Rabinovitch, however, warned that world trade was heading in uncharted territory as the US and China ramp up their threats of tariffs on each other's goods. 

He warned that every country that's plugged into the China supply chain market was vulnerable. 

"If America slaps tariffs on China-made goods, regardless of whether the inputs are being made in South Korea or the Philippines, that's going to be damaging for all the partners of the chain that have been feeding into its supply chain," Rabinovitch said in an interview with ANC's Market Edge. 

He added that since the Philippines is a big supplier in the Chinese supply chain, this means that in the short term, the country will be affected. 

"I think it's inescapable that countries, including the Philippines, will suffer a little bit." 

However, he also said that in the medium to long term, the trade spat could also open opportunities for countries like the Philippines and Vietnam, which could take up the manufacturing space vacated by China.