France and Germany could be the biggest beneficiaries in an escalation in trade tariffs between the U.S. and China, Barclays economists have projected.
U.S. Commerce Secretary Wilbur Ross reiterated on Monday that President Donald Trump is “perfectly happy” to slap tariffs on the remaining $300 billion of Chinese imports if the world’s two largest economies fail to agree a trade deal.
However, Christian Keller, head of economic research at Barclays, suggested in an analyst note that trade substitution resulting from additional tariffs, and other non-tariff related barriers, opens opportunities for core euro area economies to gain export market share.
“Our comparison of China’s import structure across its main trading partners reveals that France, Germany and the U.K. are the closest ‘U.S. proxies’ in terms of relative sectoral decomposition of their exports to China,” Keller’s note said.
Read more on CNBC.