US-China Trade War: Tariffs and Economic Conflict - Essay Sample

Introduction

A trade war is an economic conflict that arises as a result of trade barriers created by one state to restrict trade between the state and another state. There has been tremendous growth in an economic conflict between China and the United States of America (USA). The two countries started a battle of imposing tariffs on each other, and anytime the USA imposes a tariff, China reiterates. The conflict began as a result of China's fast-growing economy, which threatened the American economy. Trump, during his campaign, said that America was not going to allow another country to overcome its economy. The American trade representative came up with a proposal for investigating China's economic practices. After the investigation, they came to realize that China was doing something that would frustrate the American economic interest.

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China's economic rise was beyond people's expectations, with its GDP growing from 6% to 66% and its local spending power overtaking America. This growth opened china's economy to the world and rapidly became the world's manufacturer. China's exports increased with some of it going to America. America welcomed China to the world's trade organization (WTO), intending to protect American prosperity and promote profitable change in China. After joining WTO, China did not go as the people expected because it did not treat its businesses differently from western companies. Hence, America claimed it was not fair, and it was stealing its way to growth. America started to use tariffs to make China change its forms, but that did not happen. Anytime imposed tariffs on china imported goods, china fought back by imposing tariffs on American imports, and the duties increased by up to 25%. None of these countries want to be defeated or to lower their taxes, and their economic conflict will keep getting worse.

In my opinion, none of the two countries hold power in the economic conflict because both of the economies two countries are suffering the effects in one way or another. Businesses find it difficult to make investment decisions because they are not sure of the markets that will be opened in the future since the global economy is slowing down due to trade restrictions. In China, recycling operators and mining pilot projects are running short of imported raw materials due to restrictions and stopping their operations. In America, farmers are incurring losses due to china-imposed tariff on soybeans, which are mainly grown by western countries to sell to China.

The trade war has affected many businesses globally, and something needs to be done to minimize the impact. Economist argues that other countries should view America and china as substitutes because it will allow a business to trade from the state of its choice. The move will not only save china and America from market fall but also countries that are forced to look for alternative markets. By so doing, the aggregate global economic performance will improve.

References

Rodrik, D., 2018. How the rest of the world can avoid a trade war. Retrieved from: https://www.project-syndicate.org/commentary/china-europe-reaction-trump-trade-tarrifs-by-dani-rodick-2018=07

Schroder, P., 2019. The US-China trade dispute: What impact on the circular economy? Retrieved from: https://www.chatham.org/expert/comment/us-china-trade-dispute-what-impact-on-circular-economy