It was probably only a matter of time before reports that Chinese companies were trying to direct their goods through other Asian countries to export to the US. This should not be a surprise given that the tariffs of Chinese goods are too high compared to other Asian goods and US demand for cheap Chinese goods is too high, notes Commerzbank FX analyst Michael Pfister.
China's export redirection sparkles tension throughout Asia
“Asian countries, through which goods are directed, are unlikely to be happy about these reports. After all, they are likely to be much more complicated with Donald Trump. And countries will definitely want to avoid many higher mutual tariffs that come into effect after 90 days, which means they want to end trade agreements.
“Even during the first term of Donald Trump, it was a public secret that Chinese manufacturers deliver their goods through Southeast.
“The latter would reduce the risk of stagflation (because the goods would become much cheaper), but it would also contradict Trump to reduce US trade deficit. Is Trump really ready to pay attention to one of its most important goals?
