A Trade War Between The U.S. And The Chinese Governments
A Trade War Between The U.S. And The Chinese Governments
In the recent past, there have been many events happening globally and also at the state level. One of the main issues that have been in the limelight has been what may be called a trade war between the U.S. and the Chinese governments. Especially in the past few months, these two countries have engaged in numerous trade wars using bans and trade tariffs. Both presidents have always retaliated with a decision to hinder the other being successful, which has been termed as a cold war. Despite the various trade barriers that both governments have used, other better alternatives could be integrated to avoid any collision in the future and the advancements of adverse consequences being experienced, especially in the US A Trade War Between The U.S. And The Chinese Governments.
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- Trade Practices
The trade war between China and America may seem to many as a war between two nations; however, the global economy stands to lose if the battle between these two governments intensifies. China has always specialized in the manufacture of toys and shoes. Nonetheless, China has expanded its manufacturing sector, engaging in activities such as electric vehicles, robotics, artificial intelligence systems, and 5G telecom, an area that America has always dominated. For this reason, the Chinese government has managed to engage in numerous trade activities globally, including with the U.S. Nevertheless, the trade practices used by China are not impressive to the U.S. government and, more specifically, the president, Donald Trump A Trade War Between The U.S. And The Chinese Governments. Even before taking office in 2016, Trump always raised his concerns about the trading practices used by China. After taking office, having the authority, and holding the highest office in the land, Trump issued a directive to investigate the Chinese trade practices in 2017 (Hass and Denmark n.d.).
- Trade Imbalance
According to Trump, there has been a trade imbalance between America and China, whereby the US has been purchasing numerous products from China, whereas China has not been reciprocating. As such, Trump and his team have been trying to get China to buy more American products, which will consequently reduce the trade imbalance involved. To do this, Trump’s government has been imposing trade tariffs hoping that this will make the Chinese change. For instance, in May, the American government imposed a higher tariff on Chinese exports, increasing it from ten percent to twenty-five percent (Friedman n.d.). China was not left behind either as it increased it tariff on sixty billion dollars of American goods. Moreover, Trump’s administration placed a ban on Huawei products restricting American companies from trading with the Chinese company A Trade War Between The U.S. And The Chinese Governments.
- Adverse Effects on the American Economy
The trade war between these two countries has had significant effects on the economy. In America, the trade conflict had cost the economy about 300,000 jobs and estimation of at least 0.3% of the real GDP, as noted by Donnan and Pickert (n.d.). According to Bloomberg Economics, the trade conflict would cost the US at least $316 billion to come to the termination of 2020. The use of tariffs by the US has seen some of the largest US companies count their losses in the stock market with a cumulation of about $1.7 trillion lost in the companies’ stock prices. Companies paying the tariffs imposed on America by China endured smaller profit margins that necessitate the decrease in wages and employment positions A Trade War Between The U.S. And The Chinese Governments.
Conclusion
The US and China have continued to impose tariffs on each other without considering the alternatives that could be used to help avoid any collision in the future and the advancements of adverse consequences being experienced, especially in the US. The use of trade tariffs has been brought about by the trade imbalance between America and China. Due to these trade tariffs, both economies have experienced adverse effects. In the US, about $1.7 trillion has been lost by companies in their stock price, and at least 300,000 jobs have been lost. The two presidents need to sit down and settle things out to prevent the battle from intensifying. These two parties can have talks concerning China’s trade practices and come into a consensus that will leave each state happy instead of using tariffs, which will have a global impact. Peaceful talks are the way to go, and in case a mediator is needed, the United Nations can oversee the whole process to avoid any conflicts that could lead to future wars A Trade War Between The U.S. And The Chinese Governments.
Work Cited
Donnan, Shawn, and Reade Pickert. “US-China Trade War: Trump’s Deal May Not Cover Cost of Trade War.” Bloomberg.com, Bloomberg, 18 Dec. 2019, www.bloomberg.com/news/articles/2019-12-18/trump-s-china-buying-spree-unlikely-to-cover-trade-war-s-costs.
Friedman, Thomas L. “Opinion | The U.S. And Chinese Presidents Should Go On A Weekend Retreat.” Nytimes.Com, 2019, https://www.nytimes.com/2019/06/04/opinion/us-china-trade.html.
Hass, Ryan, and Abraham Denmark. “More Pain than Gain: How the US-China Trade War Hurt America.” Brookings, Brookings, 25 Aug. 2020, www.brookings.edu/blog/order-from-chaos/2020/08/07/more-pain-than-gain-how-the-us-china-trade-war-hurt-america/ A Trade War Between The U.S. And The Chinese Governments.
