Globalization and international trade Theory 2022

Running Head: Economics
0
Globalization and international trade theory
US China trade
9/13/2019

Economics
1
Contents
Introduction.................................................................................................................................................2
Discussion...................................................................................................................................................2
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
Appendix: Statement of Contribution........................................................................................................11

Economics
2
Introduction
The global economy can be defined as where the trade has been done for the goods and services
across the national borders. Due to the globalization, the trade in the world has emerged at the
extent level. The global economy of the country has been developed effectively due to the
trading in the other countries which was creating many issues to the global economies. There are
many issues in the global economy such as global inequality, poverty, lack of resources, global
warming, unequal development, etc. The essay is made on one of the major global economic
issues which are US-China trade war (Swanson, 2018). The war creates violence which not only
distracts the economy but also causes much loss of the property. The war has started in the US
and China due to the tariffs as China retaliates imposed the tariffs on the US goods $50 billion
which were of similar value. In this essay the detail description of the global issue of US China
trade war will be elaborated. The long-run GDP has declined and many other wages and jobs
have been lost by the person which will also be stated.
Discussion
The United States and China are considered as world’s largest economies as they have the high
rate of the GDP. The United States is the largest importer in the world and China is the largest
exporter. They both are the essential pillars of the global economy. Due to the high tariffs rate,
trade relationship between these two countries was getting hampered (Noland, et al., 2016). It is
the biggest global issues and the economic conflict which was creating the trade war between
these two countries. The conflicts were raised by president Donald Trump as he said that China
was doing unfair trade practices so he has forced china to make some changes in the trade. There
are many trade practices such as theft of intellectual property, increasing trade deficit, etc. The
global economy gets affected as Trump promotes domestic manufacturing products more so that
they can rip off by the trading partners (Stojek and Tir, 2015). Due to these lots of the pressure
was created on the manufacturers and the farmers. The instability in the stock market is raised in
the company. Many economic damages have to face due to this. They are imposing the very
higher amount of the tariffs on each other goods.

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3
Trump has made the policy of the tariff whose main aim is to encourage the consumers to buy
the goods and services through America instead of the importing goods which are more
expensive. The main focus of the trade policies launched by him was that he wants to reduce the
gap between import and export. The tariffs were increased by the countries from 5 to 10%. The
double tariffs were imposed by president Donald Trump on $200bn of the Chinese goods
(Noland, et al., 2016). So China negotiates with the US. In the last year the war between these
two countries has increased due to the unfair trading practices.
Source: barrons.com
The trade has played the major global role for these countries as trade by US tariffs on China was
$250bn in the year 2018 (Hufbauer, 2016). But tariffs threated by the Trump are much higher
which $325bn was. In the year 2018, many goods have been imported by China to the US as the
number is $5390bn. There are many products which are getting affected due to the trade wars
such as the many types of machinery, motorcycles, etc. Not only this product is get affected but
also the clothing, footwear, fish, handbags, etc. these products are majorly targeted by the
countries and rate of tariffs have been increased from 10 to 25% which was creating the major
issue in the economy.

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The prices of the imported goods have been raised due to the high tariff which was affecting the
economy at a large level. The consumers have to pay the high prices to domestic consumers as
there is no high competition in the market. The economic growth has been reduced and cost of
the materials and the parts have been raised due to the increasing tariffs. The employees and the
owners of the capital have the lower-income as the outputs of the private sector have been
reduced and price of the goods which are used in the inputs have been raised (Milanovic, 2016).
The tariffs were imposed by the United States as the statement was made by the Trump that to
protect the domestic industries and to reduce the foreign competition of China the tariffs have to
be imposed. They raise the revenue, to protect the domestic producers and inefficient domestic
industries from the foreign competition also tariffs were imposed by the United States (Liu and
Woo, 2018). By imposing the tariffs the revenues have been generated through the federal
government and also cat as the protective barriers for the domestic countries which have newly
started. Trump has imposed new tariffs which have threated many other countries also and
billions of dollars were imposed on the China imports. In the year 2018 august, the chain
declared the tariffs on 25% on the goods of the US worth $ 16 billion which includes crude oil
and vehicles (Athukorala, 2017). China has done tit for tat as United States has increased the
tariffs so the Chain also did on the goods. It is type of the protectionist trade barriers which was
creating many issues for the global economy.

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Although many issues have been faced by these two countries and in fact the economic growth
of both the countries has declined due to the increasing tariffs but still few domestic sectors get
benefited from this. The prices affected of the goods due to the increase in the tariffs and it
highly affects the economy (Handley and Limão, 2017). The global economy is highly getting
affected due to the trade war as it was putting many restrictions on another country. It does not
damage the nation but it was also impacting the consumer and the business of the United States
and China.
The inflation in the country get reduces due to the increasing cost of the goods. The choices in
the market get reduced by the consumers which were causing the shortage in the marketplace. As
tariffs have imposed at the high rates so China was not making many imports to the United
States and this results in declining the choices of the products by the consumers. The trade was
discouraged and it was causing slowdown in economic growth.
The GDP of the United States has been reduced by 25% due to the tariff imposed (Bergsten, et
al., 2014). As per the tax foundation model it was also founded that the Trump administration
has also brought many consequences as much full-time equivalent jobs have been reduced. The
wages of the employees has also declined and it was bringing the lack of capital in the market.
There are certain goods on which Trump has imposed high tariffs such as washing machines,
solar panels, aluminum, steel, and many other products. Due to the tariffs imposed by the United
States the amount of the total tax has increased by $86.13 billion. Earlier only 20% tariffs were
imposed on the imported goods of the washing machines and the solar panels but later on 50%
tariffs have been imposed on the tariffs goods. Due to this tax has been increased amounted $015
billion. The tariffs imposed by President Trump on the steel were 10% and the aluminum was
25% (Schweller 2018). The tax calculated on the imported steel was $7.3 billion and for the
aluminum it was roughly $1.7 billion. Later in 2018, August, the tariffs were imposed by the
doubled rate on the steel and aluminum from Turkey. It was levied on 20 and 50%. It was
creating economic harm to the country as lifting the tariffs on steel and aluminum was reducing
the revenue for the country.
The trade war between China and the United States was creating many fluctuations to the
economic policies also as they were doing the tit for tat for each other. So President Trump has

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decided to settle down this war and imposed 25% tariffs on the Chinese’s products whose worth
is $50 billion. Due to the increases in the tariffs amount of Chinese products resulted in the
increases in the taxes. In September 2018, 10% tariffs have been imposed on the additional
China goods of the $200 billion (Allison, 2017). Later on in the year 2019, August Trump was
threatened to impose the tariffs of the 10% on the additional Chinese goods of the $300 billion.
But there are some products which have been required by the country as they are for healthy
security and health reasons so they should be exempted. The tariffs revenues for china are $86.13
billion for the tariffs accounts of the $79.3 billion.
Image: Table showing the Impact of the Trump Administration imposed Tariffs.
The picture stated above was stating the impact of the Trump administration imposed tariffs on
the GDP, wages and the jobs of the country. All the outcomes are showing the negative results
and it was impacting the economy at the adverse level. The long-run GDP has declined by -
0.25%. The wages and the FTE jobs of the person have also declined by the -0.16% and the -
193649 which was showing the adverse effect.
Tariffs also threated the United States as the tariffs have been imported on the automobiles and
parts which were increasing the tax amount roughly of $109.63 billion (Katz, 2013). 25% tariffs
have been imposed on the automobiles such as trucks, cars, and vehicles. The administration has
announced that the on the Chinese’s products also 25% tariffs will be levied on the $250 billion

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which has increased to 30% later on. The tariffs threatened against China were $36.5 billion of
the total $109.63 billion. Due to higher level threatened tariffs the United States has to face the
many issues in the global economy. It has also resulted in declining the many GDPs, lower
wages and jobs.
Image: Table showing the Impact of the Trump Administration of threatened Tariffs.
The picture stated above was stating the impact of the Trump Administration of threatened
Tariffs on the GDP, wages and the jobs of the country. All the outcomes are showing the
negative results and it was impacting the economy at the adverse level. The long-run GDP has
declined by -0.32% (Ray, et al., 2015). The wages and the FTE jobs of the person have also
declined by the -0.20% and the -247114 which was showing the adverse effect.
China was doing the tot for tat game as when te Trump was imposing the tarried on the certain
goods China was also doing the same. China has also declared that 15% tariffs on the American
products worth $3 billion on 120 products such as nuts, wine, and steel pipes. China also
declares that he will impose 25% of tariffs on certain products such as recycled pork and
aluminum. China responded as Trump administration policy and raises the tariffs on the US
products by $12.5 billion (Morrison, 2014). The tariff revenue of China has increased by $15
billion when the rate of the tariffs has been increased by 25% on the additional $60 billion US
goods.

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Trump has threatened the Chinese’s goods by imposing the 10% tariffs on $300 billion goods.
China also imposed then 5 to 10% of the tariffs on the US goods which worth is $75 billion.
China also announced that on the US automobiles they will impose the 25 % of the tariffs and on
the auto parts. China has recently accounted for the $33.73 billion and has threatened the US
economy and the other nations with the $35.68 billion on tariffs (Duffy, 2014).
The exporting industries also suffer due to the increase in the tariffs as trading partners retaliate
with their own tariffs (Young, 2014). The domestic demand for china has decreased and it was
negatively impacting the economy of the world. The global economic growth has been slow
down as trade deficit with China was $419.2 billion in the year 2018. The economic conflicts of
the countries have also resulted in the extreme protectionism which was increasing the prices of
the products and reducing the volume and the size of the products. The tariffs which were highly
imposed on the goods include the manufacturing products, handbags, vegetable juices, etc.
Trump administration has complained that China was taking billions of dollars through unfair
trade practices from the American economy. There was also the theft of the US intellectual
property and it was estimated that it was amount for the $240 billion annually.
Conclusion
It was evaluated from this essay that the war between the United States and China for the
increasing Tariffs was creating many issues in the economy. The global economy of the country
was impacting in a negative way due to the increasing tariffs by Trump. As a result, China was
also doing the same. He was also increasing the tariffs of certain goods on the US and the
American countries. As a result many taxes have been increased by these countries and the GDP
rate of the country was declining. The inflation in the country get reduces due to the increasing
cost of the goods. The choices in the market get reduced by the consumers which were causing
the shortage in the marketplace. As tariffs have imposed at the high rates so China was not
making many imports to the United States and this results in declining the choices of the
products by the consumers. The trade was discouraged and it was causing slowdown in
economic growth.
The economic growth has been reduced and the cost of the materials and the parts have been
raised due to the increasing tariffs. The employees and the owners of the capital have the lower-

Economics
9
income as the outputs of the private sector have been reduced and price of the goods which are
used in the inputs have been raised. Due to these lots of the pressure was created on the
manufacturers and the farmers. The instability in the stock market is raised in the company.
Many economic damages have to face due to this and it results in declining the global economy
of the world and creating many issues.
References
Allison, G., 2017. Destined for war: can America and China escape Thucydides's trap?.
Houghton Mifflin Harcourt.
Athukorala, P.C., 2017. China’s evolving role in global production networks: Implications for
Trump’s trade war. China’s New Sources of Economic Growth: Human Capital, Innovation and
Technological Change, 2, pp.363-388.
Bergsten, C.F., Hufbauer, G.C. and Miner, S., 2014. Bridging the Pacific: Toward Free Trade
and Investment between China and the United States. Peterson Institute for International
Economics.
Duffy, R., 2014. Waging a war to save biodiversity: the rise of militarized
conservation. International Affairs, 90(4), pp.819-834.
Handley, K. and Limão, N., 2017. 13 Trade under TRUMP policies. Economics and Policy in the
Age of Trump, p.141.
Handley, K. and Limão, N., 2017. Policy uncertainty, trade, and welfare: Theory and evidence
for china and the united states. American Economic Review, 107(9), pp.2731-83.
Hufbauer, G.C., 2016. Could a President Trump shackle imports?. Assessing Trade Agendas in
the US Presidential Campaign, pp.5-16.
Katz, R., 2013. Mutual assured production: why trade will limit conflict between China and
Japan. Foreign Affairs, 92(4), pp.18-24.
Liu, T. and Woo, W.T., 2018. Understanding the US-China trade war. China Economic
Journal, 11(3), pp.319-340.

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Milanovic, B., 2016. Global inequality: A new approach for the age of globalization. Harvard
University Press.
Morrison, W.M., 2014. China’s economic rise: History, trends, challenges, and implications for
the United States.
Noland, M., Robinson, S. and Moran, T., 2016. Impact of Clinton’s and Trump’s trade
proposals. 16-6 Assessing Trade Agendas in the US Presidential Campaign, p.17.
Ray, R., Gallagher, K. and Sarmiento, R., 2015. China-Latin America economic bulletin 2015
edition. Global Economic Governance Initiative, Boston University: Boston.
Schweller, R., 2018. Three Cheers for Trump's Foreign Policy: What the Establishment
Misses. Foreign Aff., 97, p.133.
Stojek, S.M. and Tir, J., 2015. The supply side of United Nations peacekeeping operations:
Trade ties and United Nations-led deployments to civil war states. European Journal of
International Relations, 21(2), pp.352-376.
Swanson, A., 2018. Trump to Impose Sweeping Steel and Aluminum Tariffs. New York
Times, 1.
Swanson, A., 2018. US and China Expand Trade War as Beijing Matches Trumpʼs Tariffs.
Young, E., 2014. Alien nation: Chinese migration in the Americas from the coolie era through
World War II. UNC Press Books.

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Appendix: Statement of Contribution
Contributio
n
Introductio
n
Body Conclusion Overall
Contributio
n
Signatur
e
Comment
s (if any)
ABC The global
economy
can be
defined as
where the
trade has
been done
for the
goods and
services
across the
national
borders. Due
to the
globalization
, the trade in
the world
has emerged
at the extent
level.
The United
States and
China are
considered as
world’s
largest
economies as
they have the
high rate of
the GDP. The
United States
is the largest
importer in
the world and
China is the
largest
exporter.
They both are
the essential
pillars of the
global
economy.
Due to the
high tariffs
rate, trade
relationship
It was
evaluated
from this
essay that
the war
between the
United
States and
China for
the
increasing
Tariffs was
creating
many issues
in the
economy.
The global
economy of
the country
was
impacting
in a
negative
way due to
the
increasing
3 ABC

Economics
12
between
these two
countries was
getting
hampered
(Noland, et
al., 2016). It
is the biggest
global issues
and the
economic
conflict
which was
creating the
trade war
between
these two
countries.
The conflicts
were raised
by president
Donald
Trump as he
said that
China was
doing unfair
trade
practices so
he has forced
china to make
some changes
tariffs by
Trump.

Economics
13
in the trade.
There are
many trade
practices
such as theft
of intellectual
property,
increasing
trade deficit,
etc. The
global
economy gets
affected as
Trump
promotes
domestic
manufacturin
g products
more so that
they can rip
off by the
trading
partners
(Stojek and
Tir, 2015).
Due to these
lots of the
pressure was
created on the
manufacturer
s and the

Economics
14
farmers. The
instability in
the stock
market is
raised in the
company.
Many
economic
damages
have to face
due to this.
They are
imposing the
very higher
amount of the
tariffs on
each other
goods.
PQR The global
economy of
the country
has been
developed
effectively
due to the
trading in
the other
countries
which was
creating
Trump has
made the
policy of the
tariff whose
main aim is
to encourage
the
consumers to
buy the
goods and
services
through
As a result,
China was
also doing
the same.
He was also
increasing
the tariffs
of certain
goods on
the US and
the
American
3 PQR

Economics
15
many issues
to the global
economies.
There are
many issues
in the global
economy
such as
global
inequality,
poverty, lack
of resources,
global
warming,
unequal
development
, etc.
America
instead of the
importing
goods which
are more
expensive.
The main
focus of the
trade policies
launched by
him was that
he wants to
reduce the
gap between
import and
export. The
tariffs were
increased by
the countries
from 5 to
10%. The
double tariffs
were imposed
by president
Donald
Trump on
$200bn of the
Chinese
goods
(Noland, et
al., 2016). So
countries

Economics
16
China
negotiates
with the US.
In the last
year the war
between
these two
countries has
increased due
to the unfair
trading
practices.
XYZ The essay is
made on one
of the major
global
economic
issues which
are US-
China trade
war. The
war creates
violence
which not
only
distracts the
economy but
also causes
much loss of
the property.
The trade has
played the
major global
role for these
countries as
trade by US
tariffs on
China was
$250bn in the
year 2018
(Hufbauer,
2016). But
tariffs
threated by
the Trump
are much
higher which
$325bn was.
As a result
many taxes
have been
increased
by these
countries
and the
GDP rate of
the country
was
declining.
The
inflation in
the country
get reduces
due to the
increasing
cost of the
4 XYZ

Economics
17
In the year
2018, many
goods have
been
imported by
China to the
US as the
number is
$5390bn.
There are
many
products
which are
getting
affected due
to the trade
wars such as
the many
types of
machinery,
motorcycles,
etc. Not only
this product
is get affected
but also the
clothing,
footwear,
fish,
handbags,
etc. these
products are
goods.

Economics
18
majorly
targeted by
the countries
and rate of
tariffs have
been
increased
from 10 to
25% which
was creating
the major
issue in the
economy.
LMN The war has
started in the
US and
China due to
the tariffs as
China
retaliates
imposed the
tariffs on the
US goods
$50 billion
which were
of similar
value.
The prices of
the imported
goods have
been raised
due to the
high tariff
which was
affecting the
economy at a
large level.
The
consumers
have to pay
the high
prices to
domestic
consumers as
. The
choices in
the market
get reduced
by the
consumers
which were
causing the
shortage in
the
marketplace
.
4 LMN

Economics
19
there is no
high
competition
in the market.
The
economic
growth has
been reduced
and cost of
the materials
and the parts
have been
raised due to
the increasing
tariffs. The
employees
and the
owners of the
capital have
the lower-
income as the
outputs of the
private sector
have been
reduced and
price of the
goods which
are used in
the inputs
have been
raised

Economics
20
(Milanovic,
2016).
The tariffs
were imposed
by the United
States as the
statement
was made by
the Trump
that to protect
the domestic
industries and
to reduce the
foreign
competition
of China the
tariffs have to
be imposed.
They raise
the revenue,
to protect the
domestic
producers
and
inefficient
domestic
industries
from the
foreign
competition
also tariffs

Economics
21
were imposed
by the United
States (Liu
and Woo,
2018). By
imposing the
tariffs the
revenues
have been
generated
through the
federal
government
and also cat
as the
protective
barriers for
the domestic
countries
which have
newly
started.
Trump has
imposed new
tariffs which
have threated
many other
countries also
and billions
of dollars
were imposed

Economics
22
on the China
imports. In
the year 2018
august, the
chain
declared the
tariffs on
25% on the
goods of the
US worth $
16 billion
which
includes
crude oil and
vehicles
(Athukorala,
2017). China
has done tit
for tat as
United States
has increased
the tariffs so
the Chain
also did on
the goods. It
is type of the
protectionist
trade barriers
which was
creating
many issues

Economics
23
for the global
economy.
KLM In this essay
the detail
description
of the global
issue of US
China trade
war will be
elaborated.
The long-run
GDP has
declined and
many other
wages and
jobs have
been lost by
the person
which will
also be
stated.
Although
many issues
have been
faced by
these two
countries and
in fact the
economic
growth of
both the
countries has
declined due
to the
increasing
tariffs but
still few
domestic
sectors get
benefited
from this.
The prices
affected of
the goods due
to the
increase in
the tariffs and
it highly
affects the
As tariffs
have
imposed at
the high
rates so
China was
not making
many
imports to
the United
States and
this results
in declining
the choices
of the
products by
the
consumers.
The trade
was
discouraged
and it was
causing
slowdown
in economic
growth.
5 KLM

Economics
24
economy
(Handley and
Limão,
2017). The
global
economy is
highly getting
affected due
to the trade
war as it was
putting many
restrictions
on another
country. It
does not
damage the
nation but it
was also
impacting the
consumer and
the business
of the United
States and
China.
The inflation
in the country
get reduces
due to the
increasing
cost of the
goods. The

Economics
25
choices in the
market get
reduced by
the
consumers
which were
causing the
shortage in
the
marketplace.
As tariffs
have imposed
at the high
rates so
China was
not making
many imports
to the United
States and
this results in
declining the
choices of the
products by
the
consumers.
The trade was
discouraged
and it was
causing
slowdown in
economic

Economics
26
growth.