Now that's a more recent development.

So when a trade dispute escalates into a militarized conflict like the Opium wars of the mid 18 hundreds, that's a trade war.

What's been happening between the U.

S.

And China is fortunately not that which is not to say that the consequences of it so far have not been profound.

China will lose 1% equivalent to GDP and US side threat to be smaller than 1% point these two countries that the biggest losers from the bilateral trade attention.

But when two global superpowers face off like this, it's never just about them were interested in understanding the dispute in broader terms and figuring out if both China and the US are losing who's winning, and what does it all mean for the future of global trade in a post pandemic world?

If we're looking at action and not bravado, most agree, The trade dispute kicked off on July 6 2018 the US imposed to 25% tariff on $34 billion worth of Chinese imports, China reacted and kind on the very same day.

This tit for tat repeated again the following month.

But come September, China was not keeping up.

Over the course of the next year, the U.

S would raise tariffs and China would not retaliate.

And then, in September of 2019 a de escalation had begun.

They want to make a deal.

Frankly, they want to make a deal a lot more than Ideo.

By February of 2020 the murky Phase one agreement went into effect.

We know it kept in place the tariffs on imports from China, which were still more than six times higher than before the dispute began.

China also committed to buying an additional 200 billion dollars worth of U.

S exports targets.

That would be pretty much impossible to meet.

This is where things stood until the Covad 19 pandemic happened and changed everything.

Around a quarter of all U.

S imports came from China before the dispute began.

That's a smudge, as number two and number three import partners Mexico and Canada combined.

While the share of Chinese imports dropped during the Dispute cove, it brought Chinese imports back up to practically pre tariff levels this has everything to do with the types of goods that became necessary during the pandemic.

Like PPE and home office equipment, For example, the category of textiles that includes facemasks has risen tenfold since the beginning of 2020.

But with Chinese products becoming more expensive overall, what occurred Pre Cove?

It is actually still playing out.

And it's something economists call trade redirection iPod and iPhones and gadgets now produced by using very complicated, uh, tightly connected, interconnected supply chain network.

So now Chinese products and exports to the US say smartphone export decline.

But demand in U.

S.

Markets still exists.

So those other countries in Asia we can produce a smartphone and also export to the U.

S market.

This is what we call a trade redirection effect.

So which countries have benefited the most from trade redirection pre cove it?

Mexico, which boosted its status, is one of the US's biggest trading partners over the course of the dispute.

But after nosedive, Canada to.

But some countries have been able to hold onto their winnings even during the crisis, and they are Malaysia, Taiwan, Vietnam and South Korea, and of that group, the country who got the biggest jolt to its GDP was Vietnam.

Vietnam was really well positioned for this moment.

Not only is it China's neighbor, but it was already a leading manufacturer, making shoes in sportswear for Nike and Adidas since the nineties.

And as the chief source of phones for the world's largest phone producer, Samsung.

Just take a look at the change in Vietnam's US imports between 2017 and 2019.

Compared to China, cell phones and computers, furniture, clothing and shoes.

There's been an enormous shift in demand, one that has not gone unnoticed the last six months.

And the acceleration.

I would say it's about 2 to 3 times more than the last 24 months.

So, um, you know the trade, uh, challenge.

Just give people more motivations to do it faster.

Verses conservatively.

But Vietnam success derives not only from its expansion is an exporter to the U.

S.

But also is a recipient of something called foreign direct investment, particularly from Chinese companies looking to dodge the tariffs.

Your help.

Can you let your daughter go without the whole system?

So where do things go from here?

Is Vietnam truly a Cinderella story in a globalized economy.

It's just never that simple.

This is only a partial impact.

So China US three attention may feel, well, global, uh, economy and trade throwing down.

And that over, or a global economics going down is a bad news for even country like that.

Now, although smaller and late comer economies like those in the Asia Pacific region are making gains, trade disputes like this one are just bad business, Yeah.