International Business Report: Analysis of Trade War and its Effects

This report examines the impact of the US-China trade war on the global economy. It identifies five key reasons why this trade war affects the global economy, including the influence of major economies, price increases, the dollar's global role, inflation, and increased trade barriers. The report also proposes five measures to mitigate the negative effects of international trade, such as implementing strict penalties for harmful goods, promoting green energy, supporting local industries, strengthening trade policies to control price volatility, and establishing policies to protect intellectual property. The report utilizes several academic sources to support its arguments, providing a comprehensive analysis of the topic.

Running Head : International Business

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International Business
(1)The trade war between the U.S. and China: Why is the global economy as a whole
affected by it? Please provide 5 reasons.
Largest world economies-China and the USA are the largest economies in the world, as a
result, many economies are highly dependant on them for export and import of goods
Increase in prices- the various tariffs imposed by China and the USA as a retaliatory
move against each other has significantly initiated a butterfly effect that has resulted in an
increased price which affects consumer spending (Berthou et al, 2019)
The dollar is a major global currency-The dollar is widely used globally as a constant
value during trade, a significant decrease and increase of the dollar strength during the trade war
will have a ripple effect on the global economy (Costigan, Cottle and Keys, 2017).
Increase in inflation- the increase in prices of gold will lead to a definite increase in
global inflations that will result in slow global economic growth in the long run.
Increased trade barriers- the trade war has led to the limitation of global companies and
organizations from conductin their operations such as Goolge Inc (MacMillan and Lin,2018)
(2)what would you do to reduce the effects of five (5) disadvantages of international trade?
Import of Harmful Goods-ensuring the implementation of effective imposing strict
penalties or tariffs on counties found exporting harmful goods (Staníčková, and Vahalík 2018).
Natural resource exploitation-reducing the dependency on fossil fuel through increasing
tariffs and taxes while supporting the incorporation of green energy technologies globally.
The threat to local industries-ensuring countries in common trade blocks of trade,
prioritize on local industry growth through the signing of trade agreements.

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The fluctuation of international prices -This can be solved by establishing the and
strengthing trade policies that would limit or control the volatility of prices in the long run
Intellectual Property Risk-This can be solved by itintaiing policies that ensure the
effective registration of coperartenames as well as their trademarks before conduting business or
signiung and agreemnents to trade with iother countries inorder to potect their intellectual
property.countirss that will be in breach will faces various consequecess such as sanctions.

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References
Berthou, A., Jardet, C., Siena, D., & Szczerbowicz, U. (2019). The macroeconomic implications
of a global trade war. VoxEU. org, 8.
Costigan, T., Cottle, D., & Keys, A. (2017). The US dollar as the global reserve currency:
Implications for US hegemony. World Review of Political Economy, 8(1), 104-122.
MacMillan, D., & Lin, L. (2018, April 22). U.S.-China Trade War Is Bad News for Google's
Expansion. Retrieved from https://www.wsj.com/articles/googles-android-expansion-
mired-in-u-s-china-trade-war-1524398404
Staníčková, M. &Vahalík, B. (2018). Globalization, International Trade, and Competitiveness:
What Links These Concepts? Challenge or Threat for Competitiveness of the World
Economic Players–Especially EU, US, and China?. on European Integration 2018, 1361.