US-China Trade War: Assessing the Impact on the Australian Economy

This essay examines the impact of the trade war between the United States and China on Australia's economy. Initiated in January 2018 due to tariff impositions, the trade war has strained international relationships and disrupted global trade. The US accused China of intellectual property theft, leading to increased tariff rates. Australia's economy has been significantly affected through reduced imports and exports, leading to economic losses. The job market has also suffered as Chinese firms operating in Australia faced high tariffs, causing them to reduce investments and lay off employees. The industries dealing with clothing and electronics were particularly hit hard. The essay concludes that the trade war has had a considerable negative impact on Australia's economic growth and stability.

Running head: IMPACT OF TRADE WAR BETWEEN US AND CHINA
Impact of Trade War between US and China
Name of the Student
Name of the University
Author Note

1IMPACT OF TRADE WAR BETWEEN US AND CHINA
Strained relationships between the countries
The trade war between China and US has created a considerable effect on the world
that started on 22nd January, 2018. The main reason that led to the start of war between the
two super powers is the tariff that both the countries imposed on each other. It was regarded
that the main cause for imposing tariff rates was to restrict the business activities that both the
countries performed in the international markets. It was started by President Donald Trump
declaring that it is the step to restrict the immoral and unjust practices that China has been
performing in the sector of trade. US blamed China for the theft of copyright of products and
certain human intelligence (Wheeler et al. 2014). The Trump government has put the
regulations on trade to ensure that the practices that violate the code of conduct in the
international markets. The authority that the US senate gave to the President to impose
financial punishments on the countries that violate the trade policies created an uproar around
the world and China was the target of the increased tariff rates by the US administration
(Bhattacharyya and Williamson 2013). The impact of the trade war between US and China
due to increased tariff was reflected on every country of the world and the effects on
Australia will be discussed. The rift in the economic sphere led to a state of cold war between
the countries that supported both of them.
Effect of on the imports and exports
Australia is one of the world’s leading economy and the trade war between China and
US has an evident impact on the economy and imports of the country. The importers are
suffering from the threat of being affected by the tussle of both the countries. The threat is
experienced in the economic sphere and the Australian government has called for restraint of
the superpowers to maintain peace (Farrer 2019). The products that were exported and
imported from China were now unavailable in the markets and there was surplus quantity of

2IMPACT OF TRADE WAR BETWEEN US AND CHINA
those products that were exported to the Chinese markets this inflicted heavy losses and the
economy of Australia suffered.
Effects on the job markets
Jobs were hit when the trade war started between the two countries started to compete
and indulge in the trade war. Those individuals who were employed in the Chinese firms
operating in the Australia suffered when high tariffs were imposed on them as most of the
firms decided to leave the country and stop investing in the Australian market this situation
led to the loss of jobs and the economy of the country was hit. Australia that was a favored
destination for the investors and job seekers now was facing economic down fall that led to
the decrease of job opportunities (Bagshaw 2019). Economy is the basic structure on which
the country stands and the damage has a considerable effect on the growth of the country.
Thousands of employees were jobless and had to return to their own countries due to the
tension between the two countries. The industries that deal with clothing and electronics
suffered the most due to the trade tussle between the two super powers.

3IMPACT OF TRADE WAR BETWEEN US AND CHINA
References
Bagshaw, E. (2019). Donald Trump's trade war will cost Australia's economy at least $36
billion. [online] The Sydney Morning Herald. Available at:
https://www.smh.com.au/politics/federal/donald-trump-s-trade-war-will-cost-australia-s-
economy-at-least-36-billion-20180907-p502dr.html [Accessed 23 May 2019]. (Bagshaw,
2019)
Bhattacharyya, S. and Williamson, J.G., 2013. Distributional impact of commodity price
shocks: Australia over a century.
Farrer, M. (2019). Australia's economic growth at risk as US-China trade war escalates.
[online] the Guardian. Available at:
https://www.theguardian.com/business/2018/sep/19/australias-economic-growth-at-risk-as-
us-china-trade-war-escalates [Accessed 23 May 2019]. (Farrer, 2019)
Wheeler, S., Loch, A., Zuo, A. and Bjornlund, H., 2014. Reviewing the adoption and impact
of water markets in the Murray–Darling Basin, Australia. Journal of Hydrology, 518, pp.28-
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