Institutional Change and Macroeconomic Variables in the ASEAN—Indonesia, Vietnam, and Cambodia: The Effects of a Trade War between China and USA

Abstract

A trade war between the United States and China resulted in an increase in trade tariffs on imported goods entering each of these countries. Southeast Asian countries that have trade relations with the two countries, especially in terms of non-oil and gas exports of 25% to 35%, will be affected by export demand. Furthermore, the effects of the trade war will reduce gross domestic product (GDP) in Southeast Asian countries or the ASEAN and increase the current account deficit. On the other hand, the effects of the trade war that led to the decision of foreign investors to move their manufacturing base out of China will produce a flow of foreign investment that is ready to be captured by every ASEAN country.

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