Who would suffer most if China and OECD countries stopped trading with one another?
We imagine a scenario of severe conflict where China and OECD countries stopped trading with one another. Which of these two groups of countries would suffer the most? The answer depends on: The size of trade; The nature of trade: how easily can it be replace d with domestic production? The cost of stopping trade may result from: The absence of a domestic substitute for the imported product; The presence of a possible substitute, but with a low level of sophistication or that does not match the country’s optimal productive specialisation.