Some trade and investment is diverted through third countries, which partially offsets the erosion of direct ties between the US and China, the agency says.
The International Monetary Fund (IMF) warned that although there are still no clear signs of deglobalization at an aggregate level, countries are reevaluating their commercial ties and that has led to a process of decoupling between geopolitical rivals; In the case of the United States-China relationship, no impact has been seen thanks to the fact that trade is diverted to “connector” countries such as Mexico and Vietnam.
According to the study “Geopolitics and its impact on global trade and the dollar”, between 2017 and 2023, after an intensification of trade tensions, China’s participation in US imports decreased 8 percentage points and the participation of United States United States in China’s exports fell about 4 points.
The IMF considers that there is a world divided into three blocks: a block inclined by the United States, a block inclined by China and a block of non-aligned countries.
Thus, the weighted average quarter-on-quarter trade growth between US-leaning countries and China-leaning countries during the second quarter of 2022 and the third quarter of 2023 was almost 5 percentage points lower than the weighted average quarterly trade growth during the first quarter of 2017 and the first quarter of 2022.
At the same time, quarterly intra-bloc trade growth only saw a drop of 2 percentage points.
Source: Forbes
