The 10 countries most at risk from a trade war between the US and China

LONDON – A trade war between China and the US could impact smaller, global countries more severely than either of the two countries at the heart of the trade dispute.

Friday is the deadline for the US to impose sweeping tariffs on Chinese goods and China has promised to retaliate with tariffs of its own if the US does follow through with its threat. China’s commerce ministry said on Thursday that the United States is “opening fire on the entire world”, warning that Washington’s proposed tariffs on Chinese goods will hit international supply chains.

A new model by economists at Pictet Asset Management has produced a list of countries that would be most economically damaged by an escalation in the trade war, Reuters reported.

Countries are ranked by how integrated they are into the global value chain. The countries most at risk are those which supply raw materials to other countries, which then use those raw materials in the production of goods for export. Taiwan, South Korea, Singapore, and Ireland are all vulnerable, according to Pictet.

Here are the top 10 countries most at risk in the event of an all-out global trade war. (The percentages show how much of a country’s exports are part of global supply chains):

10. Ireland: 59.2%

The country is home to Google (NASDAQ:) HQ in Europe, and the economy is dominated by high-tech and banking services. It ranks high on foreign direct investment and is vulnerable to fluctuations in the global economy.

9. Iceland: 59.3%

Like others on this list, the country is relatively small and sensitive to market volatility. Major industries include tourism, fish processing and aluminum smelting. Most of its exports go to the EU, US, and Japan.

8. Malaysia: 60.4%

China is Malaysia’s largest trading partner, which makes it vulnerable to this potential trade war. Top industries include tin, rubber, palm oil and finance for the Islamic world.

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