Trade Wars: Impact on Global Businesses and Governments - Essay Sample

Introduction

Trade wars are a factor that happens when a country increases import tariffs by placing other restrictions on other countries' import terms. With the current economic, political, and social challenges among several countries in the world today, trade wars have been a massive obstacle in the growth and establishment of useful business services. However, other countries practice trade wars due to unfair competitors in domestic trade unions. The government policies will be effectively affected by the trade wars; this is because several countries benefit from international trade activities in perspective to another. The trade wars usually multiply and affect different other countries, which might share business opportunities with the country from one aspect to another. There has been an increase in a rift among China and United States trade activities since President Donald Trump took over the power. The trade wars began when President Trump delayed imposing new tariffs on China products. In this paper, trade wars between China and the United States will be analyzed and their impact on the growth of the economic growth in both the county and world at large.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

China and US Trade

China and United States Trade began after the US gained independence in the 17th century (Bryan, Gal, & Cheng, 2018). When starting the partnership, both China and the United States were very keen on improving their trade affairs and conquering the world as superpowers. There are various organizations which have come together in both countries in enacting a structural partnership among the two countries.

Some companies such as Apple and New Balance have been known to be sourcing their products in China. With vibrant technological advancements and strength China has been the economic dream hub to most significant organizations in the world currently. The United States partnered with China while benefiting from the revenue collection from the sales and services in china's finished product structures. China also benefits from the US established technological and robust economy, which established a sufficient superiority in both of the countries. There are over millions of jobs that have been created through goods and services produced in the United States and sold to China's economy (Griffin, 2019). There are low tariffs and quotas that both of the countries benefit from one perspective to another; this factor has led to an increase in the business activities among the two countries.

China and US trade wars, however, raised a huge concern from various sectors in both the countries. With the new government in place, the United States has been seen to start building what is termed as a new fair-trade affairs term. The new trade terms have created a massive dispute between the United States with China trade affairs, a factor that has effectively destroyed various economic structures among both of the economies. With the increase in tariffs the war between the US and China, there has been an enormous rift that grew among the business partnership among the countries. The United States trade wars were or castrated by the new trade terms tariffs, which made China withdraw his terms with the state.

Trade War Impact

Impact on the United States

The changes in the tariffs on the goods imposed on the imported by the customs and duties at each entry point of the goods have a significant impact on the growth and production of the products in the market structure. The tariff rates are intended to protect the countries local organizations from the harsh and unfriendly competition, which may destroy the local industry corporation structures in the economy. With an increase in China importation of goods to the United States such as Vehicles, electronic devices, and LED products, local industries and businessmen in the US felt affected by the partnership (Hedrick 2018). The increase in the tariff rates has resulted in an increase in the exportation charges that are imposed on the exporters. With the increase in tariff rates, most American consumers have been forced to spend most of their money on purchasing these goods. The United States market, therefore, is forced to reduce the supply rates since there is an increase in the importation as the cost of borrowing is exceptionally high. The American producers have been forced to reduce the prices of their product in adjusting with the current market rates and terms in creating harmony in the market terms rates.

The American exporters to China heard also been struck with the current tariff rates. The United States' major export to China is foodstuff, such as soya beans. The US exports an equivalent $14 billion of food to China in the year 2016 alone (Mullen, 2016). The China government, however, imposed an increase in tariff rates on the cost of Soya beans exported by the United States. The increase in the soya beans rates affected the American farmers created a factor that influenced their livelihood from one perspective to another. The trade wars have greatly affected most members of American citizen's employment rates, a factor that has dramatically dropped the living standards in the country from one perspective to another.

Several companies depended on the United States market were faced with diverting to other markets due to an increase in the tariff rates standards. The communication and machinery industry was hard hit with most of the US companies suffering a $15 billion reduction in the China export trade tariffs rates (Wallace,2019). The United States began experiencing rebellion from most countries across the world as they complain of low profit from a business partnership between the countries. The trade tariffs also affected the furniture, electricals, and chemicals and farming sectors as the business tremendously declined over the years. The US economy was also hard hit with the introduction of the following tariff rates, a factor that significantly led to an increase in the living standards rates.

Impact to China

China is in the war of revitalizing its economic stability in the world currently; however, the trade war has affected its operations from one perspective to the other on society. China has been in the process of filling economic gaps that may have affected the country's economy and stability from one aspect to another. With the current tariff rates imposition by the US, the Chinese have created several measures in which they will effectively recover from this economic degradation. The creation of another alternative action by the Chinese most of its citizens has been affected in one way or the other in the economy. The Chinese exports who relied on the US markets for their supplies are currently forced to produce their products to other markets in the world now. Several companies in China have effectively been affected by the increase in the tariff rates such as Huawei and Asia and African markets.

Chinese market rates have been affected by the trade wars with the United States from one perspective to another. According to the analysis that was done indicated that over $35 billion Chinese export losses were affected by the trade tariff by the United States (Li, 2018). The increase in the tariff rates also affected the current Chinese consumer's standards in the country from one perspective to another in the market. Most of the organizations have been forced to increase their prices of the products in the market. The Chinese firms also have recorded a massive loss as most of the firms have filed a market loss of over 75% of their initial profits (Wallace,2019). However, with the decline in the Chinese market rates, several countries have effectively benefited from these changes from one perspective to the other. The local companies in China have significantly been hit as the companies in the market structure are currently producing fewer products.

Impact on the Global Economy

With the escalation of trade wars among the world's largest economies, there is an immediate action that the world's global market will experience. The trade flows and monetary policies have greatly been affected by the clash among the superpowers countries to the global economy. Several countries have been directly affected; some of the countries such as Hong Kong, Taiwan, and Vietnam are directly affected by the trade wars. The Chinese market, however, sources various products in the market to other regions from one perspective to another. The two countries have significantly increased economic degradation in most countries in the world currently. Various countries depend on both China and the United States from one perspective to another. The following countries will be affected in one aspect to another in society.

Figure 2: Global GDP impact of Tariff rates

According to the estimation of the trade war, tariff rates imposed on China by the United States stated that the war could reduce the global GDP to 0.7% to over 2.8% in the GDP in the year 2019 (Mullen, 2016). The impact would be more durable to China's growth due to its effect on world trade activities in the market structure. China's GDP growth will reduce to (-0.9pp) based on the trade unions in the market. Argentina's global financial condition will significantly be affected in one perspective to another; this is because the country exports 60% of the agricultural produce in the market structure (Mullen, 2016). With the current trade wars effect in the economy, most of the countries are have been hindered in accessing the capital markets from one perspective to another. Some Countries like Argentina will benefit from the IMF programs by regaining their market standards in making economic trade. The Mexican economy will not suffer as they compete with China in the manufacturing of exports in the US and Canadian governments. Mexico will regain over 75% of its external sales in the market due to the trade tariff rates (Li, 2018). The trade wars between China and the United States also will impact the market trade of Chile, Peru, and Columbia. The following countries will register to allow operational market rates from one perspective to another. The following countries export copper to China, which will receive a tremendous impact due to the growth in the market structure from one aspect to the other. Columbia's economy will be significantly hit compared to Chile and Peru; this is because the country produces more of the oil. The country has weaker GDP growth, a factor that will significantly affect the stability of the country in the market.

Figure2 : shows economic sector of U.S and Chinese Trade Tariffs

Brazil, like other countries in the world, will also be affected in one perspective to another. The country depends on the import goods from the United States and China, a factor that will affect the countries profit rates. The countries using foreign direct investment policy will significantly be changed from one perspective to another. The trade wars will directly impact on the international capital flows of the country structures.

Most of the countries with lower global growth will significantly be affected by the trade wars between China and the United States. The trade wars between the United States and China have led to the collapse of domestic employment opportunities in the market structure. Most of the world's local industries have been affected by one perspective to the other. The domestic sectors have recorded a low rate of profit rate over the past years, a factor that has led to a decline in business operations among most countries. These organizations have resorted to the firing of their workers, a factor that has led to a higher unemployment rate among these countries....