Sino-American Trade War in 2018

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The USA-China Trade War

The premise for the United States-China trade war first occurred when the US Commerce Department recommended a 24% tariff on steel and 7.7% on Aluminum import on February 16, 2018. The given act was treated by the Chinese government as a direct assault against their economy. China currently represents the world’s largest market of steel and trade with the USA arrives as one of the major constituents of the country’s stable economic growth. The response measures from March 22, 2018, resulted in tariffs on American products being worth $3 billion. In its turn, it served as a stimulus for President Donald Trump to go ahead with his initial plan and to resort to even stricter policy in the matters of Chinese goods’ import. On July 6, 2018, the US government imposed $34 billion in duties against China and this decision immediately came into effect after midnight Eastern Standard Time.

China’s intentions to impose duties on agricultural and energy products from the USA in retaliation for the implemented Trump’s policy is viewed by analysts as one of the key measures to impact the U.S. economy. The country is already searching for alternative sources of soybeans that previously brought $14 billion for American suppliers annually. Many experts admit that such products as pork, chicken, nuts, and electric vehicles are soon to be targeted with extra tariffs and Chinese business owners will be forced to buy them for higher prices. Meanwhile, America threatens its opponent to raise duties on high-tech appliances, trains, medications, aircraft, and radio equipment. A predicted 25% fee increase on electronics will cost the U.S. companies an additional $12.5 billion. The situation becomes worsened by the fact that the country has few alternatives in purchasing the needed amount of high-tech devices.

Thoughts About the Trade War

Considering the seriousness of the economic conflict, both countries will suffer financial losses, although the latter may differ in amount. The occurring trade war will significantly cut China’s exports to the USA. Chinese corporations will look for new markets and will start producing new goods to undo the damage dealt by the U.S. government. However, the disruption to manufacturers will be enormous and the next two-three years will be marked by a decline in production and annual revenues for enterprises. One might suggest that many inland firms will go out of business due to a heavy impact on their operation. Nevertheless, the country will continue searching for alternative ways of establishing mutually beneficial interstate relations until the political and economic collapse is diffused.

Regarding the situation in the United States, Donald Trump’s policy course can potentially affect trade relations with other countries. The data from the U.S. Census Bureau demonstrate that the USA economy is dependent on imports, especially of that of electronic equipment. China played the most relevant part of resolving the given issue. Now that the economic war has been sparked, there is a considerable risk for the country to lose up to $50 billion of annual revenues from export. By analogy with China, many workers will be laid off and multiple companies will seize their operation. Mass media sources will be doing a particular accent on firms and people who have suffered from the economic situation most. The further events’ development will provide a severe impact on Trump’s figure and will subject his policy to serious criticism.

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Sino-American Trade War in 2018

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