"The effect of US-China tariffs would be mainly distorting," said Pamela Coke-Hamilton, head of UNCTAD's International Trade Department. "The bilateral trade between the US and China will fall and be replaced by trade originating in other countries."
The study warned that tariffs "do a little to help domestic firms" in the US and China. And even if they end up taking advantage of exporters in other countries, they also risk averting a damaging sequence of negative effects around the world.
Of the more than $ 300 billion in China and US trade, which since July hit new tariffs about $ 250 billion, is likely to switch to other economies, the UN estimates.
"Bilateral tariffs change global competitiveness in favor of companies operating in countries not directly affected by them."
Potential Domino Effect
Continuing customs struggle can further damage fragile global economy "by disturbing global supply chains and causing commodity and financial market turmoil," said the UN, warning that "more countries can join fray" by introducing their own tariffs. and that "trade tensions can spiral in currency exchange."