Trade War: US and China

BY Sandra .Finding out the backgrounds behind the commercial dispute between two giants economists. As getting the trade agreement, US and China bilateral relationship.

Term to know

Trade war :commerce when a country perceive a competitor has unfair trading, domestic union may put pressure on imports good to make it less attractive to consumers

Deficit: Amount by which the cost of country’s imports exceed value

of its exports

Tariff: a tax or duty to be paid on a particular class of imports or exports

Intellectual property: a work that is the result of creativity, to which one has rights and for which one may apply for a patent, copyright, trademark.

Outsourcing: obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source:

Introduction

In the recent decades, China become the leader of commodity exports and play a big role in international trade. China’s economic growing generally attributed to two main factors: abundant cheap workforce which promote productivity and the large-scale capital investments .However US still hold leading position in international market with major industries, stocks, and credits.

China is using its cheap workforce to build up low-price manufacture and exports more products than other country including US. In 2019 China’s exports take 20 percents of total US import and leading in export valuable products like phone system devices, integral circuits, petroleum oil. Meanwhiles, US imports to China are commercial aircrafts, soybeans, device components. Economic experts had agreed that low price workforce and exchange rate are the factors result to China’s competitive price.

The disproportion of imports price cause to the deficit of US net trade which up to $345.2 billion which become the main political issue in US presidential campaign in 2018 . President Donald Trump claimed the unfair trade of China to US imports, accused the competitor is stealing intellectual property from America companies, violating intellectual property right by asking for the involve of Chinese government to foreign companies which considered as force technology transfer.

The US and China trade war were lead by President Trump and Xi Jinping, started on 6 July, 2018 when US first imposed 25 percent tariff on 35 billion of Chinese imports .As its peak in 2019, US imposed $360 million of Chinese good, meanwhile, China had retaliated with $110 million on US goods .

Your Task

You are the guest of an interview by CNC NEWS which asking you to give your perspective about the trade war US .Below is the question you need to be prepared

Even through Donald Trump is confident with trade war, however it was against by many people because of its influence to people lives. So the question is How does the trade war affect American lives ?

Your Journey

Geography – Finding out how “big” of two countries US & China

Analyzing the topography of United States and China are important to understand the path of economic growth of two economists.

China is the East Asia state and remains the world most population with over 1.3 billions. It has great civilization in the world, multi-cultures and advantage in diversity of topography .The United States occupies a total area of 3.8 million square miles while China area is approximately 3.7 million square miles. However US has smaller land area due to its coastal water off America, island territories and state.

Photographer: Chan Long Hei/Bloomberg via Getty Images

US and China conflict has been started in the past and intense according to following events South China sea, Hong Kong democratic freedoms, the competition over technology. In particular, the break out of the pandemic had made bilateral relation worsen as Trump has blamed China responsibility in the spreading of Covid-19 virus,” must held fully accountable ” .

Political Conflict of US & China

Background of US and China trade war

Historical significance

US balance had experience trade deficit most during post- WW II. The growing of developing countries exports and China had made US’s exports less competitive in international market. In addition, China ‘s currency was wicked compare to US dollars which made its export products more cheap over US market.

US companies in the price competition with China may have to low their costs by reduce outsourcing jobs to India and China which costs amount of jobs every years .

US Trade deficit with China

Political

Donald Trump won the presidential election in 2016 with the support of people to his political point of view that promote US economy by making a trade deal with China, since China is the biggest beneficiary on US net trade.Trump also claimed about the unfair trade policies of China on US imports which made its exports has big trade deficit, and the threatening to US intellectual property. However, Donald Trump use tariffs as negotiating tactic with the target of achieving the trade deal that expecting China lift barriers on US imports alongside with intellectual property commitments. His administrations were consider as protectionism.On other hand, China said US set the barriers to its economy growth and ignoring the call of modify domestic taxes.

Economy

The net trade of two economists were affected since the following tariffs retaliations is hurtful hitting to the each domestic companies margin, stock market is being uncertain ,according to the Washington Post the escalation in the trade war causing three major US stocks to nose-dive. Particularly, paying more for raw materials is hurting manufacture industry, as it was forced to rise the price of final products, alongside is the low down in consume and people must pay more for shopping which be sparking inflation.According to 2019 study , US cost up three thousand jobs and estimate $ 316 billion in the end of this year.

Religious

Amity, China’s biggest Bible producer has made over 5 million Bibles for officially recognised Chinese churches in the past two years and has exported about 5 million in roughly 75 languages. REUTERS/ Nir Elias (CHINA)

China is the home of several religious in the world also the place where a millions christian bibles were printed and export. Book is including in the list that tariff was impose, the Christian publisher were alarmed as well as others book publishers.

China is chose to be the biggest printer since 1988 with United Bible Societies, they have developing print technology for large order and impressive with complex design. The tariff would make Christians as well as other religious believers hard to afford the books, and their religious stuffs.

Social

The New Statesman data showed that trade war not just affect economy it also affect to cultural and social exchange between two nations ,the tourism visitors of a nation to other decline in two past decade. Students studying aboard from China to US increase in 2015 due to government ‘s effort to build high class for its own. Anyway, under Trump’s administration has limited international students as the accusation to the threats to national security . The China’s students studying aboard has fallen since the war started and expect will be fewer in the future.

What is protectionism

Protectionism is restrictions on exports to boost domestic industries which shied them from foreign competition.

Last May 2018,Trump had announced 25% tariff on steel and aluminium ,means US companies will tend to buy their local steel which boosted local steel industry profit, demand hires will rise. Nevertheless, US companies need raw materials and the tariff will make the final products cost higher which hurt consumers.Trump ‘s protectionism

Consequence of the “war “

After two years of the trade war, Donald Trump and his surrogates are calling attention to his achievement in trading deal with China which is commitment to purchase an addition $200 bill US goods.

Dispute to Trump’s claimed “trade war is easy to win”. America companies were forced to cut back workforce and accept lower profit margin during trade war ,even the jobs were created again however it had slowed down the productivity and take amount of time before recovery which is significant hurt to US economy since it is the centre business of several companies around the world.

How trade war hurt American economy

A long-awaited phase one trade deal

On January 15, 2020 president Trump and China vice president finally signed a long-awaited one phase deal, easing more than 18 months trade tension.The deal focus on cutting US tariffs and boost China purchase US imports that up to $200 billion.

Suffering of US famers when agreed target wasn’t reached

Chinese retaliatory tariff on more 1,000 categories US agricultural products such as dairy products, pork, soybeans. In September , China purchases were barely halt of agreed target they need to to reach in 2020. US famers were low their profit over two years of trade war since they couldn’t access the large market as China.

What’s the toll of trade wars on US agriculture

Watching the follow video to know how trade war effect to people live: