The trade war between the United States and China has led to hundreds of billions in tariffs and disruptions in the global market — but it’s not all doom and gloom.

In fact, a number of countries are profiting from the monthslong friction between the world’s two largest economies. A study released this month by the United Nations Conference on Trade and Development looked at the repercussions of the tit-for-tat tariff hikes, finding that the countries that could benefit most are the ones that have substantial economic capacity to compete on a global scale.

“The effect of U.S.-China tariffs would be mainly distortionary,” said Pamela Coke-Hamilton, who heads UNCTAD’s international trade division. “U.S.-China bilateral trade will decline and [be] replaced by trade originating in other countries.”

Retail at Risk

While Washington has imposed tariffs on $250 billion in Chinese goods, Beijing has responded with levies on $110 billion in U.S. products.

According to the American Apparel & Footwear Association, 41 percent of clothing, 72 percent of shoes and 84 percent of accessories sold in the U.S. hail from China.

Trade organizations including the Footwear Distributors & Retailers of America have criticized the trade war, warning not only of the potential harm to the United States’ reputation but also the impact of rising import-export costs on consumers.

“It’s very difficult to see how [mounting tariffs] don’t negatively impact all Americans in every walk of life,” FDRA president and CEO Matt Priest said in a prior interview with FN. “The president claimed that trade wars are easy to win, but what our industry has always known is coming true: Trade wars are costly, unnecessary and do harm to the American economy.”

Canaccord Genuity Inc. analyst Camilo Lyon also previously told FN that several U.S.-based footwear firms have recently looked to take advantage of China’s growing consumer economy by selling more of their wares in the country.

China has been the “most important growth market for many U.S. brands,” according to Lyon, with Tapestry, Michael Kors and Steve Madden among the footwear and apparel makers with substantial businesses in the region.

Next-Door Neighbors

Southeast Asia has been viewed as a promising beneficiary from the trade war, with Vietnam already stepping up its footwear exports in an effort to capture some of China’s dominant market share. The country had exported nearly $11.8 billion worth of footwear between January and September last year — a 10.5 percent increase over 2017’s total, reported its Ministry of Industry and Trade. It ranks second after China among the U.S.’s biggest sources of footwear, exporting 405 million pairs of shoes to America in 2017, per FDRA data.

As the largest economy in Southeast Asia, Indonesia can also take advantage of an exodus from China — the country exported about 104 million pairs of shoes in 2017. During a CNBC interview at the World Economic Forum in January, Minister Airlangga Hartarto indicated that a number of companies producing footwear and textiles have already begun to explore opportunities outside of China.

Additionally, Tom Lembong, chairman of the country’s Investment Coordinating Board, shared in an interview with Bloomberg two months ago that Indonesia could anticipate billions of dollars in investment from corporations shifting away from China.

“For Vietnam, Indonesia, Cambodia and other countries, over the last 20 years, we’ve lost so many factories to China,” Lembong told the business news agency. “Having them come back is qualitatively very positive for us, in terms of jobs, in terms of balance of payment and the like.”

Europe & Beyond

Of the $250 billion in Chinese exports slapped with tariffs, about 82 percent will be captured by companies in other countries, while Chinese firms retain 12 percent and U.S. businesses keep only about 6 percent, according to the UNCTAD. On the other hand, out of the $85 billion in U.S. exports subject to levies, about 85 percent will be taken by companies in other countries, while U.S. firms hold on to less than 10 percent and Chinese businesses grab only about 5 percent.

The UNCTAD suggested corporations in Europe, Mexico, Japan and Canada could stand to collect tens of billions of dollars in export orders as a result of the long-drawn-out financial dispute. Countries in the European Union are forecasted to take the biggest share of exports, seizing an estimated $70 billion of U.S.-China trade (about $50 billion of Chinese exports to the U.S. and $20 billion alternatively). Mexico, Japan and Canada will each take upwards of $20 billion, the report estimated.

“Bilateral tariffs alter global competitiveness to the advantage of firms operating in countries not directly affected by them,” the UNCTAD said.

Want more?

What to Know About the US-China Trade War as Tariff Ceasefire Deadline Looms