Trade War Between China and the United States Case Study 2022

“TRADE WAR BETWEEN CHINA AND THE UNITED STATES” 1
“TRADE WAR BETWEEN CHINA AND THE UNITED STATES”
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“TRADE WAR BETWEEN CHINA AND THE UNITED STATES” 2
“The current state of the trade war between China and the United States”
Trade war results when a nation imposes tariffs or other forms of trade protectionism and the
targeted nations retaliate by imposing the same trade protectionist measures. The trade war is not
the best practice as it causes a reduction in international trade. Trade war arises when a nation
protects its domestic industries against foreign competitors with the aim of reducing trade
deficits with the targeted nations and creating jobs among others (Abboushi 2010, p.384). In the
short run, trade war expands the domestic industries of the nation which imposes tariffs against
the others. This is because tariffs imposed increase the price for goods and services of the foreign
competitors and hence increase the market for the locally produced goods and services. This
makes the local businesses to grow significantly. In the long run, the targeted nations retaliate
and impose similar trade protectionism measures and this slows down the economic growth for
both nations (Evenett and Fritz 2015, p.18). The nations will also end up experiencing inflation
as the price for goods and services in both nations rise due to the imposed tariffs. In this report, a
discussion of the current state of the trade war between China and the United States has been
done. From what has been experienced from the trade war between these nations, it is clear that
trade war can cause economic growth slowdown not only for the nations involved in it but also
for the other nations worldwide.
The trade war between China and the United States began after the United States President
Donald Trump began accusing China of unfair trade practices even before he came into power
(Loridas 2011, p.403). The trade war took effect serious after President Donald Trump took the
presidency of the United States. It all began when the United States levied tariffs of 25 percent
on steel imports from all nations except Brazil, Argentina, South Korea and Australia and 10