University Economics Report: An Analysis of the US-China Trade War

This report analyzes the US-China trade war, examining its origins, impacts, and potential future developments. It explores the trade imbalance between the two countries, the imposition of tariffs, and the resulting effects on various sectors. The report discusses China's low production costs, the impact of protectionist measures, and the implications for consumers and businesses. It also considers the significance of trade balance, the role of exports and imports, and the broader consequences for the global economy. The analysis references various academic sources to support its findings, providing a comprehensive overview of this complex and evolving trade dispute. The report highlights the importance of understanding the dynamics of international trade and the potential ramifications of trade wars on a global scale. The report also includes references to the impact of the trade war on the US trade deficit and the future of trade relations between the two countries.

US-CHINA TRADE WAR
The two biggest economies of the world has been on trade war that is United States and China. The trade between the
two countries began in 1970 and it grew rapidly. As trade increased, the transactions also increased and the faith
increased too, which added on to the debts of the country, with China’s Gross Domestic Product (GDP), as on 2014,
being US$ 10, 356.508 billion, which made the government debt f China US$4.3 trillion. The increasing debt has been
creating pressure on US to stop trade with China and this has brought in the US-China trade war (Chen, Chen &
Dondeti, 2019). The trade between the two largest economies has been impacting the world at large and the impact on
each of country has also been intense. The causes and the factors that led to the situation is to be explored and explained
thoroughly.
ABSTRACT
As the trade war began in 2018, China cancelled to
Soybean imports from America and it imposed tariffs
on Chinese steel exports and other goods. China has
been known for its low cost of production due to which
the exports of the country are high (Herrero, Xu &Gary,
2018). The reason for the low cost of production could
be stated as the low standard of living which keeps the
wages of the labours low and other could be the
exchange rate which is partially fixed to the dollar. The
implementation of trade protectionism by US would
provide the consumers with high prices for the goods
made in the country itself (Huang, Lin, Liu & Tang,
2018). This would not impact the trade deficit in
anyway, in fact the people would pay low amounts for
the electronics and computers, no matter if the
Americans lose their jobs
CAUSES OF TRADE WAR
EXPORTS
US TRADE DEFICIT with CHINA
On acknowledging the US-China trade war, the significance
of the balance of trade is revealed. The necessity to maintain
a balance between the exports and the imports o the country
has been revealed and had the two countries maintained the
balance, the war would not have taken place (Lee, 2019).
Future of Trade War
References
Chen, A. W., Chen, J., & Dondeti, V. R. (2019). The US-China trade
war: dominance of trade or technology?. Applied
Economics Letters, 1-6.
Herrero, A. G., Xu, J., & Gary, N. G. (2018). IS THE MARKET
OVERREACTING TO THE US-CHINA TRADE WAR?
YES IF ONLY FOCUSING ON TRADE MEASURES.
Huang, Y., Lin, C., Liu, S., & Tang, H. (2018). Trade Linkages and
Firm Value: Evidence from the 2018 US-China'Trade
War'.