The US-China trade war is debilitating not just for the two largest world economies but for bystander nations. Global markets are so interconnected that even North Korea, the most isolated and secretive country in the world, is feeling the effects of this confrontation. Meanwhile, Europe is bearing the brunt of the related economic havoc as if it is a direct party to the conflict.
Analysts at the Frankfurter Allgemeine Zeitung (FAZ) combed through a survey by consulting firm Prognos AG, conducted at the request of the Bavarian Industry Association (VBW), and concluded that the trade war between China and the United States could cut European exports by 11% and imports by 17%. An escalation in the trade conflict could seriously hurt the currency bloc’s economy. Thus, Europe will have to choose the side of the conflict and be ready to suffer heavy damage. Choking off access to the Chinese market will be a serious blow to the European Union. The risk of losing a significant portion of revenues is very high. Experts agree that the region will likely support American partners. In response, Beijing is expected to close its market for Western companies.
Thus, none of the participants will benefit from the conflict. Along with trade ties, the key sectors of the EU economy are potentially at risk. Most of them are now dependent on supplies from Asian countries. What is more, a sharp decline in exports and imports could push the European economy into double-digit unemployment territory, while jobless rates in some countries of the bloc are already high.
