Impact of US-China Trade War on Domestic and Global Economy

Running head: INTERNATIONAL BUSINESS
International Business
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INTERNATIONAL BUSINESS1
Executive Summary
The unfair trade practices followed by China led US to restrict import from China. President
Donald Trump has imposed series of tariff on billion dollars of good imported from China. In
return, China has retaliated by imposing tariff on goods that US exports to China. The
imposed tariff by both nations destroyed the trade relation between the two nation. In an
attempt to evaluate the likely impact of trade escalation KPMG modelled three different
economic scenarios and summarized the results in its last published report. The paper
produces a brief summary of KPMG report and examines further development of trade
disagreement and its likely consequence on domestic and world economy.

INTERNATIONAL BUSINESS2
Table of Contents
Introduction................................................................................................................................3
Key findings of KPG report.......................................................................................................3
Subsequent development of trade disagreement between China and US..................................5
Three scenarios modeling trade disagreement...........................................................................5
1. Limited Escalation, no contagion.......................................................................................6
2. Full escalation, no contagion..............................................................................................6
3. Full escalation, full contagion............................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8