Trade War: Impact of USA-China Trade Dispute on Global Economy

This report provides an analysis of the trade war between the USA and China, focusing on the imposition of tariffs and the subsequent retaliatory measures taken by both countries. It examines the impact of the trade war on the global economy, including the effects on countries like Australia. The report discusses China's responses, including negotiations and domestic policies to stabilize the economy. It highlights the potential long-term consequences, such as the disruption of the WTO and the possibility of economic recession. The report concludes that the trade war has far-reaching implications beyond the USA and China, affecting international trade dynamics and economic stability. The report also includes references to relevant research and publications.

TOPIC: TRADE
WAR BETWEEN
USA AND CHINA

INTRODUCTION
 Government of USA wanted to
switch to protectionism.
 Increased the tariff on the
Chinese products.
 China retaliated with further
tariff on the products of the
USA.
 Led to the trade war between
the two countries.
 Trade transaction between
these two countries halted
leading to a slowdown in the
global economy.

CHINA’S RESPONSE
 Immediate retaliation to
the trade impose by the
USA.
 25% tariff on the products
previously imported from
the USA (Hughes and
Meckling, 2017).
 Price of American
Aluminum, Pork, Soya
beans in Chinese market
went up.
 Government of china
stated that they were not
in favor of the trade war.

CHINA’S RESPONSE
 Government of China went to the WTO for
complaint against the USA.
 Negotiated with the government of the USA.
 Further imposition of tariff despite
negotiation led to the escalation from the
side of China.
 China imposed further 25% tariff on 50 billion
USD worth of American products (Lee, 2018).
 Meanwhile, China was looking for negotiation
with other partners in order increase its
exports.

CHINA’S RESPONSE
 Undertook several domestic policies to
stabilize the economy as well.
 Increased interest for higher domestic
investment and internal demand for
goods and services (Noland, 2018).
 The government of china looked for
domestic investment so that aggregate
demand for the goods and the services
can be increased.
 For the short term it managed to meet
its goal.

IMPACTS ON AUSTRALIA
 In short run, demand for exporting
goods of Australia increased (Irwin,
2017).
 USA threatened to quit the WTO which
would mean inability of the organization
to mediate between the countries and
resolve dispute in the future.
 In the long run, WTO may cease to
function leading to a mismanagement.
 Global economy may slow down leading
to a shrinking Australian national GDP.

CONCLUSION
 Trade war not only impacted USA and
China it has impacted other economies
as well.
 China responded with both negotiation
and retaliation.
 The government of the USA stated that
protectionism is the need of the hour for
the country.
 In the long term, the economy of
Australia is also under the threat of
economic recession.

THANK YOU

REFERENCE
 Hughes, L. and Meckling, J., 2017. The politics
of renewable energy trade: The US-China solar
dispute. Energy Policy, 105, pp.256-262.
 Irwin, D.A., 2017. The false promise of
protectionism: why Trump's trade policy could
backfire. Foreign Aff., 96, p.45.
 Lee, Y., 2018. Economic Interdependence and
Peace: a Case Comparison Between the US-
China and US-Japan Trade Disputes. East
Asia, 35(3), pp.215-232.
 Noland, M., 2018. US trade policy in the Trump
administration. Asian Economic Policy
Review, 13(2), pp.262-278.