Which sectors are most vulnerable in the US-China value chain?

In this report, we focus especially on which segments of the Chinese and American economies are most vulnerable to a disruption of global supply chains caused by the US-China trade war. We also assess the impact for the Netherlands as an example of a ‘third country’ where several industries will be harmed (indirectly) by these disruptions. Roughly 50% of total gross US imports and exports consists of intermediate goods; this figure is even higher for China, for which 70% of gross imports and 62% of gross exports are intermediates. Our analysis shows that despite the bigger negative macro impact on China, the US is more exposed to disruptions to bilateral intermediate trade flows than China. For the US, computers and electronic products, electronic equipment and textiles/shoes are the most vulnerable segments, at risk of both direct and indirect effects. For China, the wood and cork products industry is the most vulnerable to a disruption of supply chains caused by higher tariffs. Transport equipment, paper products and pork production also have some vulnerabilities. The Dutch companies that are the most vulnerable in the supply chain between China and US are basic metals producers, manufacturers of computers and electronic products, paper products, and machinery products. Consumers in the Netherlands are likely to see impact on prices in the coming period on computers and electronic products (such as smartphones), and electrical equipment (such as medical equipment) as the higher tariffs feed through in higher retail prices