A protracted trade war could hit everyone, it’s too early to talk about winning – former head of the Armenian Ministry of Finance

YEREVAN, April 10. /ARKA/. The trade war could harm all parties if it becomes protracted, said former Armenian Finance Minister Vardan Aramyan in the "ARKA Business" program on the ARKA news agency’s YouTube channel.

"Trade theory suggests that when countries of similar economic strength clash in a trade war, both suffer," he noted.

Speaking about the United States and China, Aramyan stated that both countries would face consequences, with a contraction in both consumer demand and production capacity.

"In both the United States and China, consumers will lose additional purchasing power, and producers will lose the ability to manufacture additional products," he explained.

Regarding relations with smaller countries, such as the United States and South Africa, Aramyan pointed out that the burden will fall more heavily on South Africa than on the United States.

"In the case of Europe and the United States, both will suffer. Even though Europe's GDP is smaller than that of the United States, integrated supply chains play a significant role. US companies may have production facilities in Europe, and they too will be affected," he added.

When asked who might benefit from such a trade war, Aramyan stated that time will tell. "It will depend on the comparative advantages of different economies. What matters is the supply chains that large conglomerates control and which countries they can shift production to. Regardless, the transition will be costly. Changes in the economic environment don't happen quickly," he concluded.