The ongoing trade tensions between the United States and China, two of the world’s largest economies, have reverberated far beyond their borders, reshaping not only the customs brokerage fees but also global trade dynamics and economic strategies.
What began as a series of tariff hikes and retaliatory measures has evolved into a broader geopolitical and economic standoff, disrupting supply chains, altering investment flows, and prompting shifts in global market confidence.
While much of the focus has been on the direct impact on the U.S. and Chinese economies, the ripple effects have been deeply felt across developing and developed nations. Countries with strong trade ties to either power, those embedded in global manufacturing networks, or those reliant on commodity exports have experienced both challenges and unexpected opportunities.
In today’s article, your favourite team of Mexican customs brokers is going to explore the multifaceted consequences of the US-China trade war on the economies of third-party countries, analyzing how different regions are adapting, repositioning, and in some cases, benefiting from the shifting global order.
Background of the US-China trade war
The US-China trade war officially began in 2018, but its roots stretch back decades. Tensions had long simmered over issues such as trade imbalances, intellectual property theft, and the role of state-owned enterprises in China’s economy. As the United States’ trade deficit with China widened, American policymakers and industries grew increasingly vocal about what they perceived as unfair trade practices and a lack of reciprocity in market access.
The conflict escalated dramatically during Trump’s administration, which adopted a more confrontational trade policy. The U.S. imposed a series of tariffs on hundreds of billions of dollars’ worth of Chinese goods, citing Section 301 of the Trade Act of 1974 to justify the action based on China’s alleged unfair trade practices.
In response, China retaliated with tariffs on American exports, particularly targeting agricultural products such as soybeans, which were critical to U.S. farmers. This retaliation exchange intensified global market volatility and raised fears of a prolonged economic standoff between the two superpowers.
At the core of the trade war are broader concerns about technological dominance and national security. The U.S. has accused China of forced technology transfers, cyber-espionage, and subsidizing its tech sector to gain an unfair global advantage.
Regional impacts of the trade war
The ripple effects of the US-China trade war have been felt unevenly across the globe. While some countries have struggled with collateral damage due to their reliance on trade with either the U.S. or China, others have seized opportunities to fill the gaps left by disrupted supply chains. The extent and nature of the impact vary significantly by region, reflecting differences in trade structures, economic dependency, and political alignments.
1.- Southeast Asia
Southeast Asian countries, particularly Vietnam, Thailand, and Malaysia, have been among the primary beneficiaries of the trade tensions. As companies looked to reduce their dependence on Chinese manufacturing to avoid U.S. tariffs, many shifted operations to Southeast Asia, a region known for its relatively low labor costs, strategic location, and expanding industrial capacity.
Vietnam, in particular, saw a surge in foreign direct investment and exports, especially in electronics and textiles. However, the rapid influx of production also strained infrastructure and highlighted challenges related to regulatory capacity and workforce development. At the same time, some countries in the region remain cautious, aiming to balance their economic ties between the U.S. and China without getting caught in the geopolitical crossfire.
2.- Latin America
Latin American economies experienced a mixed impact. On one hand, countries like Brazil and Argentina found new export opportunities, especially in agricultural products such as soybeans and beef, as China sought alternatives to U.S. suppliers.
On the other hand, the broader economic uncertainty and slowdown in global trade dampened investment and growth prospects. For countries heavily reliant on commodity exports, the volatility in global markets triggered by the trade war also brought fiscal instability and currency fluctuations.
3.- Europe
Europe’s reaction to the trade war has been largely shaped by its efforts to maintain economic independence while navigating the pressures from both the U.S. and China. As major exporters, European economies like Germany were affected by declining global demand and disruptions in supply chains, particularly in the automotive and machinery sectors.
Moreover, as the U.S. adopted a more protectionist stance, Europe faced increasing uncertainty regarding transatlantic trade relations. Simultaneously, the European Union has sought to strengthen its trade ties with Asia through agreements like the EU-Vietnam Free Trade Agreement and has called for a more assertive trade policy to defend its interests.
4.- Africa
Africa’s involvement in the trade war has been more indirect, yet the implications are still significant. China is Africa’s largest trading partner and a major investor in infrastructure through initiatives like the Belt and Road Initiative (BRI). Any disruption in China’s economy affects demand for African exports such as minerals, oil, and agricultural products.
At the same time, the trade war has prompted China to deepen its economic ties with African countries as part of its diversification strategy, which has resulted in continued Chinese investment in ports, railways, and technology across the continent.
However, concerns remain over debt sustainability, the nature of trade imbalances, and the long-term benefits of Chinese engagement. African countries face the dual challenge of navigating external economic pressures while seeking to build more resilient and diversified economies.
Long-term implications for global trade
The US-China trade war has accelerated shifts that were already reshaping the global trade landscape, signaling a move away from decades of globalization toward a more fragmented and strategically driven world economy.
One of the most notable trends is the potential emergence of a bipolar trade system, with countries increasingly aligning themselves with either the U.S. or China based on strategic interests, market access, and technological standards. This could lead to parallel supply chains, diverging digital ecosystems, and competing regulatory regimes.
Another long-term impact involves the decline of multilateralism in global trade governance. The World Trade Organization (WTO), already weakened by years of stalled negotiations and enforcement challenges, has struggled to mediate such large-scale disputes.
More countries may turn to bilateral or regional trade agreements as more flexible and politically viable alternatives, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the Regional Comprehensive Economic Partnership (RCEP).
Finally, the trade war has prompted many nations to rethink their economic resilience and strategic autonomy. Concepts like “friendshoring” and “reshoring” have gained momentum, with governments and companies seeking to reduce their dependence on vulnerable or politically risky supply chains. While this could promote domestic industries and create new regional hubs, it may also raise costs and reduce efficiency, posing challenges for global growth.
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