Spillover Effects of China-US Trade War on Southeast Asian

Abstract

A trade war between China and us has started in 2018. China has been considered a threat by American politicians they are trying to use a trade war as a tool to contain China’s high-speed development. However, China will not allow the US to be seized without putting up a fight. With the advance of the trade war, China and the US have had several rounds of confrontation by raising tariffs. It’s hard to really say which side won the overall victory, nevertheless, the trade war between China and the US has diffused the whole world economic environment. In order to avoid the raised tariffs from the competitor, China, and the US transfer the import resources to the country that has lower tariffs on the same goods. The third-party country would attend the trade war by gaining the spillover effect of the trade war. Southeast Asia has eleven countries, such as Thailand, Cambodia, Vietnam, the Philippines, Malaysia, Singapore, Indonesia, and Timor Leste. Most of them have China or the US as their biggest trading partner. When China raises tariffs on a certain commodity to the United States, which may find the third country in order to replace China to evade tariff sanctions. The Countries in the Southeast become the optimal choice for the US. They also have low labor costs, close transportation routes, and many employment vacancies. Therefore, Southeast Asia has become one region in the world that has a spillover effect of the China-US trade war.