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Expand chart
Data: The Observatory of Economic Complexity; Graphic: Lazaro Gamio/Axios

A trade war between the world's two biggest economies would have repercussions across the world.

The bottom line: President Trump's tariffs are meant to be a blow to Beijing, but their secondary effects will hit the countries involved in the production chains of goods that come out of both the U.S. and China — and that list, depicted above, includes nearly every economy in the world.

The big picture: Every country that exports to China could be hurt if U.S. tariffs are aggressive enough to slow Beijing's economic growth and force it to buy a smaller volume of imports.

The losers...
  • U.S. allies in the Far East like Japan, South Korea and Taiwan that are deeply integrated into the manufacturing processes of high-end consumer products like smartphones.
    • Japan and South Korea, for example, are big exporters of integrated circuits to China, where they get used in the final assembly of electronic devices which are then shipped to the U.S. and other countries.
  • European companies whose production chains have roots in both the U.S. and China are at risk.
    • One example is BMW, a German carmaker that manufactures its automobiles in the U.S. and sells them to the Chinese. Beijing's retaliation package includes action against U.S. autos.
  • International suppliers that work with American companies like Boeing, one of China's targets, could feel the burn if Beijing starts canceling orders and Boeing, in turn, slows down production. Boeing has suppliers in Japan, Italy, the U.K. and Canada, Thomas Duesterberg, an international trade policy expert at the Hudson Institute, tells Axios.
  • American farmers, who are the targets of China's proposed soybean tariffs, will be hurt as they lose access to the Chinese market.
  • Chinese and American consumers, who will see higher prices if tit-for-tat tariffs keep escalating.
    • China, the world's largest consumer of pork, is targeting American pork and soybeans, which are often used to feed pigs in China. As prices for both those products rise, it'll be more expensive to eat pork across China.
...and the winners
  • International companies that compete with American ones could see a sales bump.
    • Airbus could gain from Boeing's loss of sales to China, although Boeing might make up for the loss of the Chinese market by diverting to India and the Middle East, says Duesterberg.
    • Japanese carmakers could benefit if retaliation slows American auto sales in the Chinese market.
  • Latin American exporters of soybeans could partially satisfy China's demand for the product as Beijing turns away from American farmers, but it's unclear whether there's enough growing capacity in South America to replace the U.S. as a source, according to Duesterberg.

What to watch: There would need to be stronger trade action from both sides before outside countries would see this kind of impact. "What [the U.S. has] proposed so far is just symbolic, the Chinese are just gonna laugh at it ... They won't change their behavior," says David Dollar, the U.S. Treasury's former economic and financial emissary to China, who's now at Brookings.

To counter China, the U.S. needs to cooperate with its allies, many of whom are frustrated to be the direct or indirect targets of Trump's recent trade moves, he says: "China's rise is such a serious challenge that the U.S. and Europe definitely need to work together to try to shape a global order that encourages good Chinese behavior."

Go deeper

Updated 3 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Coronavirus cases hold steady at 65,000 per day — CDC declares racism "a serious public health threat" — WHO official: Brazil is dealing with "raging inferno" of a COVID outbreak.
  2. Vaccines: America may be close to hitting a vaccine wall — Pfizer asks FDA to expand COVID vaccine authorization to adolescents — CDC says Johnson & Johnson vaccine supply will drop 80% next week.
  3. Economy: Treasury says over 156 million stimulus payments sent out since March — More government spending expected as IMF projects 6% global GDP growth.
  4. Politics: Supreme Court ends California's coronavirus restrictions on home religious meetings.
  5. World: Iran tightens COVID restrictions amid fourth wave of pandemic.
  6. Variant tracker: Where different strains are spreading.
Miriam Kramer, author of Space
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NASA's delays Mars helicopter test flight

Ingenuity (left) with Perseverance on Mars. Photo: NASA/JPL-Caltech/MSSS

NASA announced Saturday it rescheduled its Ingenuity Mars helicopter's first experimental flight, originally planned for Sunday.

The latest: "During a high-speed spin test of the rotors on Friday, the command sequence controlling the test ended early due to a 'watchdog' timer expiration," NASA said in a statement. "This occurred as it was trying to transition the flight computer from ‘Pre-Flight’ to ‘Flight’ mode."

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Scoop: Ohio Senate candidate Josh Mandel escorted out of RNC retreat

Ohio Republican Senate candidate Josh Mandel. Photo: Chris Maddaloni / Getty Images

During this weekend’s highly anticipated donor retreat hosted by the Republican National Committee in Palm Beach, Ohio Senate candidate Josh Mandel was escorted off the premises while his primary opponent, Jane Timken, was allowed to stay, two sources with direct knowledge of the situation tell Axios.

What we’re hearing: The invitation-only event is taking place at the Four Seasons Resort, and the RNC reserved the entire hotel. While Timken, former Ohio GOP chair, was invited to the event “because she is a major donor” — Mandel was not, so he was asked to leave, according to one of the sources.