IMPACT OF THE UNITED STATES AND CHINA TRADE WAR ON GROWTH IN ASEAN COUNTRIES

For more than a century, American had the biggest economy and the highest Gross Domestic Product (GDP) about 24.1%. On the other side of the world. Recently, China with 15.1% Gross Domestic Product (GDP) placed as the second biggest and the most influential economy in the world in 2017 (World Bank, 2019). Therefore, China and United States together have over 40% of the world GDP with the huge spatial economic influence in the world. The impact of a trade war between the United States and China has a negative influence in other countries and regions in particular in the ASEAN countries. The ASEAN countries are very exposed to China and United States they are more vulnerable to trade war between the United States and China. This study first evaluates the degree of negative impact of China and United States trade war on ASEAN countries. After that, show how an effective regional economic integration can minimize such problems in future. This research is based on available secondary data in United States government reports (e.g., United States Department of State, Office of United States trade) and (e.g. OCBC Bank and ASEAN). Based on data and research the descriptive-analytical method is used in this paper.


Introduction
Trade war is known as protectionism and in fact is an action that government takes by tax or tariff. The recent trade war is between the United States and China "US-China" trade war. There are some differences between this trade war and the other trade wars in the world. First, the United States and China together have over 30% of the world population and they have over 40% of the world GDP. Second, these two countries do not put the tax on one or two products and in fact, they are looking for bigger goals. More important the Donald Trump current president of the United States is a businessperson rather than a politician. The market size is the real matter of trade war (Miyagiwa et   That said, the impact on ASEAN may vary due to different dependence on US-China trade and the potential recalibration of production lines and/or redirection of trade flows due to the tariffs. Singapore and Malaysia are potentially the most exposed, while Indonesia, Philippines and Vietnam may have less to lose based on our scorecard using the four criteria we chose (OCBC Bank, 2017).
The OCBC Bank in a scenario based report showed the situation for ASEAN countries will be very bad by the United States and China trade war. In fact, OCBC Bank provided two scenarios for potential impact on growth the two possible scenarios followed by (1)  . These lines cover about $34 billion worth of imports from China. USTR aimed to put up the additional duty of 25 % on these 818 products after having sought and received views from the public and advice from the appropriate trade advisory. The second set contains 284 proposed tariff by the interagency Section 301 Committee as benefiting from the Chinese industrial policies, including the "Made in China 2025" industrial policy. These 284 lines will cover about $16 billion worth of imports from China, which should have public notice. After that, there will look at the list again and see if certain products need to additional duties. USTR recognizes that some U.S. companies may have an interest in importing items from China that are covered by the additional duties. Accordingly, USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action. USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks (UTSR, 2018).

China and ASEAN Business View
The best business in two-way in ASEAN countries and after ASEAN countries themselves China is the second country with the most export and import. China as the biggest country in the world close to ASEAN countries owned 15.2% of total business, which imports 19.4% of products from China and 11.4% of total export to ASEAN countries. Whereas, the United States stands in the fifth level after the ASEAN, China, Japan, and European countries. The trade between the United States and ASEAN countries is totaled 9.4% of the total ASEAN countries with 7.6% import 10.9% export. It shows the United States looks for more influence in ASEAN countries by importing technology and industry and less on import. However, China looks for more energy and more agricultural products. China and United States efforts in ASEAN are about more physical and spatial expansion in these countries. They enter in the name of investment, banking, industrial development, and oil and gas, but the region it is important for them. In fact, there is a competition between China and the United States in ASEAN countries. According to an assessment report by OCBC, the trade war between China and the United States can have a destructive impact on the ASEAN countries. The OCBC report is based on two bad scenarios. The first scenario is a mild trade war with $50billion of US tariffs that will be tangible by China and Asian countries. The second scenario is under the serious trade war with $250 billion of United States tariff and it will risk the China and Asian countries' GDP growth between 0.1% to 0.5% points.

Revised GDP growth under scenario (2)
2.7% 6.0% 0.9% 2.7% 3.2% 5.2% 5.0% Source: CEIC, OCBC Bank (2018) The China business partners are more trans-regional and less with Asian and ASEAN countries in comparison to the United States that has very big trade partners in Asia and with ASEAN countries (OCBC, 2018). Importantly, China is the most important country that adds foreign values to ASEAN countries. China spatial economic expansion in the world made some benefits for East Asian and in particular ASEAN countries. China bilateral manufacturing and exports in ASEAN countries conducted a large amount of wealth and created the most complex global value chain between ASEAN countries United States, Korea, Germany and some important European Union countries. The regional integration in Asia and between ASEAN countries has made an effective impact on the global market. About 60% of final manufactured goods between 1995-2015 sent to trans-regional markets. However, the United States share in the world has been just 40% of the manufactured goods. Hence, ASEAN countries and China can increase their capacity and extend their market.
The impact of the United States and China war is significant for those countries which are more exposed to China and the United States economy, Countries with depended manufacturing sector to regional and global market, (OCBD, 2018) countries with sectoral development, countries that provide raw materials for China and United States, countries which their energy sector heavily relies on China and Russia, and Countries need foreign direct investment. Therefore, ASEAN countries with a different degree of exposure to the United States and China are Myanmar (28%), Laos (24.5%), Vietnam (22%) and Indonesia (18.1%) trade most heavily with China. Meanwhile, Vietnam (11.9%), Malaysia (10.6%) and the Philippines (10.2%) are most exposed to the US.

United States-China Trade War Impact on Singapore
Asian countries accounted for over 70% of the trade in two ways in Singapore and at the same time, Singapore has a special place in the Asian economy. Figure 1 shows the level of Singapore export exposure by region and it shows that Singapore is too vulnerable to any issues among Asian, American, and European trade. Instead, the Singapore level of import exposure by region shows is countries that are more vulnerable to no Asian. Singapore import in comparing to export from European and American countries is much higher. While import from Asian countries in comparison to export shows a significant increase. Therefore, Singapore is too vulnerable to the United States and China war with the highest level of direct and indirect exposure.  Table 4 shows that Singapore totaled 20.8% export and import with the United States and 24.3% export and import with China. Therefore, China has the biggest influence in the Singapore economy and the United States and China together have over 45% influence in the Singapore economy. Important Singapore and China import and export are almost balanced with 14.5% export and 13.8% import whereas, Singapore trade with the United States with import 10.5% and 6.3% export is not balanced.  The Unites States and China trade war has negative and positive points in different sectors in Singapore. There is a strong probability that the United States and China trade war increases the regional and inter-regional trade among Asian and ASEAN countries and shipping and logistics sector benefit from that. On the other hands, those industries that depend on United States investment, or technology (e.g., aluminum, manufacturing machinery, electronics) (OCBC, 2018) will loss. Singapore and entire ASEAN countries are not vulnerable to what they import from the United States or China. In fact, they are vulnerable from import and those sectors that rely on import from China and the United States.

United States-China Trade War Impact on Malaysia
The palm oil, solar panels, machinery, LED, and semiconductors will most probably affect the United States and China trade war. Different sectors in Malaysia will never get the same feedback from the trade war. Raw products in comparison to the industrial and manufacturing sector will improve (OCBC Bank 2018). Table 5 shows that China-Malaysia trade in terms of export and import is equal (18.4% export and import 18.4%) and higher than the United States (12.7% export and 7.8% import).  After United States and China trade war, some sectors in Malaysia loss and some of them gain.
• Chemical products will "gain" because American replace Malaysian chemical products with Chinese products. • Palm oil industry "gain" and will increase rapidly with United States tariff on soybean.
• LED industry "gain" Malaysia after China is the most LED supplier to United States and Malaysian can get the Chinese position. • Solar Panel "loss" because of United States 30% tariff and Malaysia provides 25% of the total solar panel in Unites States. • Machin part and components industries "loss" because some part of the Chinese products that export to China produce in Malaysia and tariff on them will get the negative impact of United States and China trade war. • Electronics export to China "loss" Malaysia main trade with China are electronics and electrical products.

United States-China Trade War Impact on Indonesia
Raw agricultural and mineral products in Indonesia most probably affected by the United States and China trade war include machinery, coal, rubber, palm oil, iron & steel. Table 6 shows that China has more influence in the Indonesian economy with 13.7% export and 22.8% import totaled 36.3% and the United States with 10.5% export and 5.25% import totaled 15.8%. Where Chinese import is two times bigger than Chinese export, on the other hand, the United States is export two times bigger than the United States import.

In fact, Indonesia has mixed influence from United States and China war.
• Indonesia does not have a significant place in the United States economy and there is not a very big business market between the two countries. However, the United States tariff on aluminium and steel will affect Indonesian industries, which rely on aluminium and steel. • Metal base and articles from Indonesia to China are the third important export. United States tariff on Metal base might cause Chinese to prefer to dump other partners. • Indonesia trade with China is very big and Indonesia base metal export to China is higher than the United States (OCBC, 2018).

United States-China Trade War Impact on Vietnam
United States and China trade war's impact on different sectors in Vietnam include clothing, footwear, garments, electronic parts, wood, and steel are different. China (16.5% export and 27.5% import) share in Vietnam market is two times bigger than the United States (19.3% export and 4.4% import). Chinese import from Vietnam is bigger than Chinese export. On the other hand, United State export is 4 times bigger than United States import.  • Textile and garments might "gain" from high demand and shifting from China neighbouring countries. • Consumer and goods industry "gain "China has (China plus one) strategy and Vietnam is part of that strategy for the low cost of living and cheap labour force. • Machine parts "loss" Vietnam in this sector is intermediate and they support the Chinese market that export to the United States. • Steel "loss" will affect by tariff as the 12th steel exporter • Manufacturing "mixed" Vietnam as neighbouring country can get benefits. However, there is a big fear of dumping Chinese products.

United States-China Trade War Impact on Philippines
Philippines, among other ASEAN countries have a different situation in the United States and China trade war. The Philippines national planning policy at the local level is not intertwisted to regional and global facts. Therefore, despite Philippines trade exposure to the United States and China trade war country development relies on domestic consumption and the Philippines do not feel the impact. However, their impact trade war will be on steel, pork, electronics, processing. Table 8 shows that China has a bigger influence than the United States in the Philippines. The Chinese share in Philippines export with 10.4%, slightly lower than Americans does with 13.4%. Whereas, the Chinese import with 17.6% from the Philippines is by the far bigger than the American import with 7.8%. China and the United States together have about 49.2% of Philippines export and import. • Pork "gain" from the United States tariff on Chinese pork and Philippines pork can take over the Chinese market. • Steel "gain" as the Philippines is one of the steel importers from the United States and they might lose their clients due to the tariff on steel. • Electronics "loss" as the United States and China are a big export destination and import origin for electronic products in the Philippines Thailand automotive industry and fresh processed fruits will affect by China and United States trade war. The trade conflict between will harms the tiny primary Thailand export. However, Thailand shifted from China to United States and the trade between Thailand and United States passed 20 billion in 2017. Table 9 shows Chinese influence in Thailand trade is 2 times bigger than American. Chinese export with 12.5% and American with 11.2% shows slightly different. However, Chinese import with 20% is 3 times more than the American import by 6.7%. • Fresh and processed fruit "gain" Thailand after Chinese tariff on American agricultural products can open special place in never ended Chinese fruit and agriculture market. • Automotive "gain" as Thailand is one of the most important players in ASEAN countries after American tariff on the car and spare part. Thailand attracts European companies to the Thailand manufacturing plant. • Tech products "loss" intermediate Chinese goods that assembles in Thailand.

United States-China Trade War Impact on Myanmar
Entire industries in Myanmar are vulnerable to the trade conflict, including cattle, FDI, fish, natural gas and wood. Table 10 shows the Chinese influence in Myanmar economy is 12 times bigger than Americans. Chinese export with 29.9% is 17 times bigger than American export with 1.7%. In addition, Chinese import with 26.6% is 8 times higher than American import with 3.4%. Chinese and American together totaled 61.6% of Myanmar trade. Chinese influence in Myanmar economy is very deep and from 61.6% of Myanmar economy is very deep and from 61.6% of Myanmar export and import 56.6% are Chinese share and 5.1% is American shared.

United States-China Trade War Impact on Cambodia
Cambodia has a big trade with the United States, which is textile is dominated as the biggest and most important. Therefore, the trade war between the United States and China does not have a significant impact in Cambodia. Table 11 shows the Chinese export to Cambodia with 12.5% is slightly higher than American export by 11.2%. Instead, Chinese import with 20% is 3 times higher than American import with 6.7%. Furthermore, Chinese with 32.5% and American with 17.9% totaled 50.4% trade in Cambodia.

United States-China Trade War Impact on Brunei
Brunei has less trade exposure to China and the United States and that is not significant. China with 2.2% and the United States with 0.4% have a minimum impact on the Brunei economy. However, Chinese import with 20.8% from Brunei is two times bigger than the American with 9.4%. Chinese and American influence in Brunei export and import is less than entire ASEAN countries with 23% Chinese and 9.8% American and they totaled 33.1% which Chinese trade with Brunei is 2 times higher than American.

United States-China Trade War Impact on Laos
Chinese are the biggest exporter in the Laos market and Laos export machinery in the United States. The trade conflict does not have a significant impact on Laos economy. However, the United States and China trade war can give better opportunity that after tariff of Chinese machinery products loss products take over part of the American market. Table 13 shows that Chinese with 28.6% export Laos 15 times higher than American with 1.8%. and Chinese import from Laos with 21.5% is 43 times higher than American with 0.4%. However, the United States 2.2% and Chinese with 50.1% totaled 52.3% of Laos.

Conclusions and Recommendations
American and Chinese owned the biggest parts of trade in ASEAN countries, which is usually over 50%. However, Chinese has the biggest influence and share among ASEAN countries. Chinese and American do not have the same interests in these countries. By the better words, where Chinese export to a country is bigger, the American export is lower and when Chinese import is lower American import is higher.
The ASEAN countries are very important for China because they are big market and close to China, energy and natural resources, food and agricultural products. American look for the same thing and they want to keep their hegemony in Asia and Among ASEAN countries in competition with Russia and China.
Chinese has a very deep influence in poor ASEAN countries including Myanmar, Cambodia, Brunei, and Laos. Chinese share from import and export in poor ASEAN countries sometimes is over 50%. The countries with the highest level of exposure to China and the United States trade will be more vulnerable to the future consequences. However, Finally, the first United States tariff does not have significant impact on ASEAN countries. The second United States tariff on Chinese products will affect different sectors in ASEAN countries. The statistics show those countries that have less level of exposure to the United States and China are in safer situation. Therefore, it is very important for ASEAN to have more regional integration for future impacts of trade conflicts in the world. Also, they should look for new markets and reduce their dependency to United States and China.