Trade War Assignment 2022

TRADE WAR 1
Trade War
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TRADE WAR 2
Executive summary
The concept of trade war seems to have gained momentum particularly in the economic politics
involving mega economies that are growing. This is best witnessed in the ongoing trade war
between the U.S. and China. Such trade wars leave the international economy in jeopardy as the
powers struggle for attention and prestige. Such a war is not without repercussions to traders,
citizens and industries as they are caught in between and have to bear the blunt of trade war. This
report will look at trade war between the U.S., China, E.U and Mexico, its causes and, the
consequences.

TRADE WAR 3
Table of Contents
1.0 Introduction............................................................................................................... 4
2.0 Body....................................................................................................................... 4
2.1 Causes of China-U.S. trade war................................................................................... 4
2.2 Effects of the trade war.............................................................................................. 6
2.3 Macroeconomic impacts............................................................................................ 6
2.4 Trade war with the E.U............................................................................................ 10
2.5 Tariffs against Mexico............................................................................................. 10
2.6 Impact of the trade war............................................................................................ 11
3.0 Conclusion............................................................................................................. 12
References................................................................................................................... 13

TRADE WAR 4
1.0 Introduction
China is changing its strategy where it is focusing a change from labor-intensive and
export-controlled economy to an economy that is consumption-driven. Such a transformation has
led to upgrading industrial environment propelled by innovation and technology. However, such
a change in the trade game may not be significantly received by counterparts such as the U.S.
particularly in the short-term (Farrer, 2019).The U.S. was compelled to change its trade policy
with China way back before imposing the trade sanctions. Specifically, the U.S. view towards
China shifted from that of cooperation as stipulated in the 2015 national strategy report to that of
must compete with all tools at disposal. It is thus anticipated that China and its counterpart may
enter into a new deal, but this will consume a lot of time and also commands efforts from both
players. In the meantime, tensions between the two nations have led to instability in the financial
markets.
2.0 Body
2.1 Causes of China-U.S. trade war
One of the factors behind that have facilitated the trade war is the strategy of unfair
competition. It has been reported that China’s corporations exploit the American markets while
China’s markets, on the contrary, remain closed to the goods and services and corporations from
America (Prazeres, 2019). Such an unfair competition translates to lower output, factories
exiting the market and job losses for American industries most impacted by the Chinese
competition. Chinese enterprises have also been associated with duplicating technology from
U.S. companies (Gurdus, 2019). To address such an issue of grave importance, the U.S. had no
option but to impose sanctions against goods and services from Chinese enterprises. That is a
similar narrative that has traces to the 1980s when Japan became the unfair trade partner. The