How is the UNCTAD trade war report measuring harm to both economies?

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UNCTAD Report Quantifies Economic Damage from US-China Trade War

The UN Conference on Trade and Development (UNCTAD) report measures the economic harm resulting from the US-China trade war by analysing the decline in bilateral trade, the cost passed on to consumers and firms, and the diversion of trade to other nations. The analysis focused on the impact of US tariffs, finding a significant reduction in imports from China and an increased cost burden on American consumers and businesses. While the report inferred similar negative consequences for China from its retaliatory tariffs, it detailed how trade shifts benefited third countries.
US Imports Declined and Costs Increased Due to Tariffs

The UNCTAD report found that US tariffs imposed on Chinese products led to a 25 per cent decrease in imports of these sanctioned goods during the first half of 2019. Furthermore, the analysis indicated that the majority of the financial burden associated with these tariffs was transferred to either US consumers or domestic firms. Chinese exporters also responded by reducing their prices to maintain their market share in the United States, absorbing some of the cost themselves.
Trade Diversion Benefited Other Nations

Of the approximately US$35 billion in Chinese exports to the US market that were impacted in the first half of the year, the report identified that around US$21 billion was redirected to other countries. Nations such as Taiwan, Mexico, and the European Union saw increased exports to the US, particularly in sectors like office machinery, agri-food, transport equipment, and electrical machinery. Taiwan, for instance, experienced an additional US$4.2 billion in exports to the US, largely in office machinery.
Inferring Harm to the Chinese Economy

While the UNCTAD analysis primarily focused on the impact of US tariffs, the report inferred that Chinese tariffs on US imports would likely yield analogous negative outcomes. This inference suggests that Chinese consumers would face higher prices, and US exporters would experience losses. Although specific quantitative measures for the harm to China's economy were not detailed in the same way as for US imports, the qualitative assessment pointed towards comparable economic repercussions.
Unaccounted Trade and Domestic Capture

The report indicated that out of the total impacted Chinese exports to the US, the remaining US$14 billion, beyond the portion diverted to other countries, was either lost entirely or captured by domestic US producers. This suggests that while some trade shifted to third countries, a portion of the market was either diminished or filled by American companies, contributing to the overall economic adjustments driven by the trade dispute.

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How is the UNCTAD trade war report measuring harm to both economies?

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