Impact of US-China Trade Disagreement on Global Economy: KPMG Report

RUNNING HEAD: International business 0
International business

International business 1
Contents
Introduction...........................................................................................................................................2
Summarisation of KPMG......................................................................................................................2
Subsequent development in the US-China trade disagreement..............................................................3
Three scenarios modelled by KPMG.....................................................................................................4
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

International business 2
Introduction
On 28 August 2018, KPMG Australia issued a report, Trade Wars: There are no winners, on
economic demonstrating of the anticipated impact of the recent US- China trade
disagreements. The Chief Economist of KPMG, Brendan Rynne observed the current trade
war between two countries, US and China. The consequences are evaluated even if trade
stays limited or expands globally. The current US-China trade agreements intensified into an
all-out global trade war can severely damage domestic and global economy. The KPMG
Australia has found the new economic modelling. The involvement of the substantial number
of the countries in the trade war would reduce Australian national income by almost half a
trillion dollars over the ten years. It is same to the 40% of last year’s total household
disposable income. The report looks at what has happened to the date along with what has
been legislated and enacted.
Summarisation of KPMG
The globalization is driven by the technology, transportation and international cooperation.
The economic, political and technological barriers to the international trade have collapsed
globally in the recent years. The rapid globalization has lifted poverty in the emerging
countries. The globalisation is composed of the trade flows between rich countries and the
East Asian region (The Financial Times, 2018). The other countries like Australia have been
benefited from greater integration with China. The report of KPMG comprises the subsequent
development in the US-China trade agreement. The scenarios modelled by KPMG are also
discussed. Both US and China are the two largest economies in the world and are instigating
a mounting trade war with each other. The trade talk took place between both the countries in
Washington, D.C. The discussion failed to resolve the economic tensions between US and
China. The KPMG Australia represented that as the scenario progressed due to the trade
between US and China, it put negative economic consequences on both the countries. The
follow on impact to the global economy is also damaging (Wise, 2016).
The US-China trade agreement aimed at globalisation to merge separate national markets into
one huge global market place. It is a shift towards independent world economy. The
Australian producers faced competitive advantage in penetrating the Chinese market. China is
largest trading partner of Australia. Australia produces many of the things which China also
sources from US (Hughes & Meckling, 2017). The exports that appear on the list of US