US-China Trade War: A Result of US Apprehension? - Essay Sample

Introduction

For the past three decades, China has been the target of the United States warfare exertions. Among other things, regional trade disparities fuel the conflict that is experienced at the multilateral level (Morrison, 2011). At the same time, intense technology between the two economic giants has been attributed to lead to the war. However, research shows that the global scenario for the US-China trade war is as a result of the apprehensive nature of America; the need to forsake its multilateral corporate stance. This poses threats to US-China relations, as well as the American international order (Morrison, 2011). The paper will describe regional trade disparities between the US and China and then explain why the supply chain of advanced technology products is not yet fully successful.

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Donald Trump has been a key player to complain about regional trade disparities between the United States and China. According to statistics, there was a general trade deficit in that in 2018 it was $417billion up from $374 billion in 2017 (Steinbock, 2018). Policymakers highlight that the trade deficit is so far incurred because of the unfair regional trade relationship. Nonetheless, other scholars see the data as misleading; they believe that the beneficiaries of the convectional trade might be benefiting from the trade. Also, economists propose that the overall regional trade disparities are a result of low US domestic savings, which do not match the investment needs (Steinbock, 2018). However, it is argued that China has industrial policies in place, which at many times leads to tensions. The Chinese government limits domestic firms from transitioning completely into the market economy. For example, state-owned enterprises, which at all times get benefits such as subsidies, tax breaks among others are not allowed to participate in the global supply chains. China has economic plans that appear to focus on their own economy than global partnerships. These activities make Trump's administration to characterize such policies as economic aggression. On the other hand, most officials contend that the participation of Chinese firms in global trade particularly in information and technology is likely to cause risks to the national security interests of the US.

Regional trade disparities, particularly on the supply chain of advanced technology products, are not fully successful between the US and China because of the issue of national security concerns. In 2017, Donald Trump introduced the national security strategy, which acted as America's strategic rival. The US has a worse perception of China for a postwar in the international order. The US believes that China has no substantial basis because, in their trade relations, China has caused the US trade deficits as from the 1970s (Wang, 2010). The discrepancies are historical, something that makes Trump think that China is prepared to replicate the US's strategic and economic success. America's attitude towards China is negative since the era of Bill Clinton and George Bush. From the evidence discussed, the US finds it difficult to trust China in advanced information and communication products. For instance, the multilateral trade of Apple matters to the US economy; iPhone's value adds less than 5 percent of the Chinese economy (Chong & Li, 2019). The overall size is in the US, therefore, such an example is a domestic saving and investments and not trade barriers. Furthermore, when Trump got elected he announced the withdrawal of the US from Trans-Pacific partnership. It is believed that this was a trade threat to China since he was determined to undermine China's state plan. In April 2018, Donald Trump openly declared a trade war against China given that it is the only country, which produces and supplies information, communication and telecommunication equipment (Chong & Li, 2019). Trump authorized the US federal government to impose trade tariffs on China's exports, something that forced China to retaliate.

US-China trade war is political given the fact that the US is prepared for a global economic dominance battle (Chong & Li, 2019). Therefore, it will be important to propose a political solution. However, the driving force of the conflict can be traced from the American political system. To solve these issues, US voters should elect a president who will not lead them to a midterm curse. This is because previously, Trump had promised to resolve regional trade inequalities particularly trade deficit, but during the midterm elections, he adopted racial policies to please some of his supporters. The incumbent president should have a vision of a tension that might occur in the future given that China is ever-growing, for instance, its production is ranked second in the world.

The strategy that can be used to achieve the best international trade policy is free trade agreements (Kuhn, Pestow & Zenker, 2019). The United States and China are economic giants who have a significant impact on the global economy. They should, therefore, resolve their trade war by entering into contracts that will address regional trade inequalities; this will facilitate logistics, trade, and border management. Also, agreements will allow them to enter into a global value chain, something that will allow the interchange of advanced technology equipment. Free trade agreements will also help reduce tariffs on imports, especially in China hence reduce the trade deficit that Trump keeps complaining about.

Conclusion

In conclusion, the trade war between China and the US has raised concerns around the world because of its effects on the global economy. America's policies have tried to loom China to diminish its trade and investment especially on its state-owned businesses, but China seems to be growing in terms of its production.

References

Chong, T. T. L., & Li, X. (2019). Understanding the China-US trade war: causes, economic impact, and the worst-case scenario. Economic and Political Studies, 7(2), 185-202. https://www.igef.cuhk.edu.hk/igef_media/working-paper/IGEF/igef%20working%20paper%20no.%2071%20english%20version.pdf

Kuhn, T., Pestow, R., & Zenker, A. (2019). Building climate coalitions on preferential free trade agreements. Environmental and Resource Economics, 74(2), 539-569. https://www.econstor.eu/bitstream/10419/170671/1/CEP011.pdf

Morrison, W. M. (2011). China-US trade issues. https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1867&context=key_workplaceSteinbock, D. (2018). US-China Trade War and Its Global Impacts. China Quarterly of International Strategic Studies, 4(04), 515-542. https://www.worldscientific.com/doi/pdf/10.1142/S2377740018500318

Wang, D. (2010). China's trade relations with the United States in perspective. Journal of Current Chinese Affairs, 39(3), 165-210. https://journals.sagepub.com/doi/pdf/10.1177/186810261003900307