US-China Trade War: Potential Impacts on Kyrgyzstan’s Economy

12:00, March 10, 2025, Bishkek – 24.kg, Artem SUVOROV The United States has raised import duties on Chinese goods to 20 percent. In response, China announced additional tariffs on select American products. According to the Chinese Ministry of Commerce, the new tariffs of 10–15 percent will affect agricultural imports, representing a direct reaction to President Donald Trump’s trade policies. In addition, Beijing has expanded its export controls by adding 15 American companies to its restricted list. Economic expert Iskender Sharsheev spoke with 24.kg about how this trade conflict could affect Kyrgyzstan. In his view, the repercussions may be quite significant. Indirect Effects Through Global Supply Chains and Regional Dependence Sharsheev emphasizes that Kyrgyzstan’s direct trade ties with the United States are minimal, and its exports to China are limited. However, Kyrgyzstan remains exposed to indirect impacts due to its integration into global supply chains and its close economic links with major partners—particularly China and Russia. “China, as Kyrgyzstan’s largest trading partner, plays a key role in supplying a wide range of goods to our market, including textiles, electronics, and equipment,” Sharsheev noted. “A large portion of these goods is then re-exported to other member states of the Eurasian Economic Union (EAEU).” With higher tariffs in place, some Chinese goods originally destined for the U.S. market may be redirected to Central Asia. In the short term, this could lower prices in the Kyrgyz Republic due to oversupply in certain product categories. In the longer term, Sharsheev warns, reduced Chinese production—prompted by decreased access to the U.S. market—might lead to higher import prices for Kyrgyzstan. “If Chinese companies scale back production due to weaker global demand, there could be disruptions in component supplies,” he said. “This risks destabilizing local markets and driving prices upward.” EAEU Influence and Food Security Kyrgyzstan’s membership in the EAEU ties its economic fate closely to Russia’s. Sharsheev notes that if the U.S.-China trade war pushes Russia to increase agricultural exports to China—thus replacing American products—overall availability within the EAEU could drop. “Given that Kyrgyzstan imports around 40 percent of its food, we could face higher prices and growing inflationary pressures,” Sharsheev explained. Currency fluctuations pose an additional challenge. A weakening of both the Chinese yuan and Russian ruble, likely outcomes of the trade conflict, could lead to higher inflation in Kyrgyzstan. Because the som is closely linked to the ruble, import costs may rise as the currencies of key trade partners depreciate. Export Potential and Emerging Opportunities Direct effects on Kyrgyzstan’s exports to China—which mainly consist of raw materials and agricultural goods—are expected to be modest. However, indirect consequences remain possible. On the one hand, China’s search for new markets may reduce its need for Kyrgyz exports. On the other hand, as China replaces American imports, demand for certain Kyrgyz products—such as berries, textiles, or specific agricultural raw materials—may increase. Debt Vulnerability and the Need for Diversification “Kyrgyzstan’s public debt to China, currently about $1.66 billion, underscores another point of vulnerability,” Sharsheev noted. “If China’s economy weakens, our options for debt restructuring or new financing could narrow.” To mitigate these risks and adapt to new economic realities, Sharsheev recommends that Kyrgyz authorities intensify efforts to diversify the national economy, enhance export capabilities, and strengthen regional trade partnerships. Expanding re-export activities and deepening cooperation within the EAEU could also prove essential.