The US-China trade war States is expected to boost the Indian economy with a 3.5 per cent rise in exports while the biggest winner will be the European Union (EU), which will gain $70 bn in additional trade, according to a recent report by the UN Conference on Trade and Development (UNCTAD). A handful of nations will benefit from the trade diversion.

“Substantial effects relative to the size of their exports are expected for Australia, Brazil, India, the Philippines, Pakistan and Vietnam,” the report, titled ‘The Trade Wars: The Pain and the Gain’, said. Bilateral tariffs alter global competitiveness to the advantage of firms operating in countries not directly affected by them, it said. The study found that European exports will grow by $70 bn, while Japan, Canada and Mexico will see exports increase by more than $20 bn each.

“Countries that are expected to benefit the most from US-China tensions are those which are more competitive and have the economic capacity to replace US and Chinese firms,” it said. The trade war will also have a number of negative effects on global trade, especially within certain markets, the UNCTAD said. There will be huge costs if the trade war intensified and Asian countries are likely to suffer most from protectionism, it said. East Asian producers will be hit the hardest, with a projected $160 bn contraction in the region’s exports.