Impact of US-China Trade War on Australian Economy

Running head: ECONOMICS
Economics
Name of the Student
Name of the University
Course ID

1ECONOMICS
Table of Contents
Introduction................................................................................................................................2
Trade restriction between USA and China.................................................................................2
Impact of trade restriction on Australian economy....................................................................2
China’s response to the trade restriction....................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

2ECONOMICS
Introduction
United State has maintained a steady relation with China since its independence.
Relation between the two nations is strong, complex and have various positive aspects for
both the economy. The trade relationship between USA and China supports nearly 2.6
million employment in United State across a broad range of industries. With rapid expansion
of middle-income group US exporter face a significant opportunities to expand their business.
In 2015, China purchased US goods and services valued nearly $165 billion (Lanteigne
2015). This represents 1 percent of total economic output and 7.3 percent of exports of US.
The paper discusses impact of recently impose trade restriction between USA and China on
the economy of Australia. The report also evaluates response of China in line with economic
principles.
Trade restriction between USA and China
Despite having a beneficial trade relation, China and USA in recent years have been
headed for a trade battle. US president Donald Trump in 2016 has claimed that China uses
unfair trade practices. After this claim, US carried out an investigation into the trade practices
used by China. US then imposed a tariff on Chinese goods worth billions of dollar. US until
now imposed three rounds of tariff on China’s good valued more than $250 billion. The
imposed tariff ranged from 10 percent to 25 percent (bbc.com, 2018). The tariff has been
imposed on good covering a wide range from handbags to railway equipment. Trump
threatened to impose on another $267 billion worth of goods indicating all imported goods
from China could be subject to import tariff.
Impact of trade restriction on Australian economy
As China and USA are two of the biggest economies in world, the impact of trade
restrictions will not be limited within the two nations only. The trade will spread globally