Tashkent, Uzbekistan (UzDaily.com) — The escalation of the trade war between the US and China could further widen Uzbekistan’s trade deficit, Otabek Tozhiddinov, Director of the Central Bank’s Foreign Exchange Regulation and Balance of Payments Department, said on 12 February.

According to him, the global standoff between the world’s two largest economies will inevitably impact Uzbekistan, as China remains one of its key trade partners. Potential consequences include a decline in Uzbek exports to China alongside an increase in imports of Chinese goods.

Tozhiddinov recalled a similar situation during Donald Trump’s first presidential term. In 2018, the US imposed tariffs on Chinese aluminum and steel, prompting retaliatory duties from Beijing on American goods.

“In 2019, Uzbekistan’s exports to China fell by 22%, while imports surged by 34%. This demonstrates that when the US market imposes restrictions, China seeks alternative export destinations, one of which is Uzbekistan. As a result, the country’s trade deficit may increase,” he explained.

At the same time, he noted that the expansion of Chinese imports into Uzbekistan and other Central Asian countries could boost the development of the transport and logistics sector, partially offsetting the negative impact.

Tozhiddinov added that the Central Bank has not yet conducted a detailed analysis of the potential effects of a new wave of the US-China trade war. He stated that a clearer assessment of its impact will only be possible after at least one quarter.