Comprehensive Report: The US and China Trade War and Its Consequences

This report provides an analysis of the US-China trade war, drawing on multiple sources to explore its economic impacts. It examines the effects of tariffs on prices and welfare, the shifts in supply chains, and the implications for both countries and the global economy. The report discusses how the trade war has influenced international trade, the role of policy uncertainty, and the impact on various sectors, including technology and manufacturing. It also considers the strategic implications, including potential shifts in global power dynamics and the responses of other nations. The report covers the viewpoints of various authors and publications, offering a comprehensive overview of the conflict and its wide-ranging consequences.

Running head: US AND CHINA TRADE WAR
US and China Trade War
Name of the student
Name of the University
Author note

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Amiti, M., Redding, S. J., & Weinstein, D. (2019). The impact of the 2018 trade war on
US prices and welfare (No. w25672). National Bureau of Economic Research.
The authors of the article are Mary Amiti, Stephen J. Redding and David E.
Weinstein. Mary Amiti is from the Federal Reserve Bank of New York and Stephen Redding
is from the Princeton University. The author David Weinstein belongs to the Graduate School
of Arts and Sciences of the Columbia University. This article talks about the effect of the
trade policy of Trump administration on the elements of the prices along with the welfare.
The article discusses that the US has experienced the substantial increase in prices of the
intermediates along with the final goods. It has brought about dramatic changes in the supply-
chain network. The article can be said to be useful owing to the fact that it has made use of
economic methods for finding out that the full incidence of tariff falls on that of the domestic
consumers. The value of the article lies in the fact that it has find out how the trade war can
bring about the reduction of that of US real income.
Li, C., He, C., & Lin, C. (2018). Economic Impacts of the Possible China–US Trade
War. Emerging Markets Finance and Trade, 54(7), 1557-1577.
The authors of the article are Chunding Li, Chuantian He and that of Chuangwei Lin.
Chunding Li and Chuantian He belongs to the Research Center for International Trade and
Economics. The article has made use of the global general equilibrium model that can help in
simulating the impact of the trade war of China-US. The findings of the research is that it has
talked about how China would lose to the US owing to the trade war. The introduction of the
trade wars would bring about the intensification of negative effects. The article has talked
about how the involvement of Mexico in the trade war with that of US can strengthen the
negative effects in relation to US. The useful of the article resides in the fact that it has

2US AND CHINA TRADE WAR
stressed on how the trade wars would hurt various countries of the world in terms of GDP
along with the manufacturing employment.
Katznelson, I., & Shefter, M. (Eds.). (2018). Shaped by war and trade: International
influences on American political development (Vol. 79). Princeton University Press.
The author of the article is Ira Katznelson who is a political scientist of America who
is famous for the research on that of liberal state. Another author of the article is Martin Allen
Shefter who is an author who has carried out extensive research on the politics of the New
York City. The book has talked about the external influence on the United States and it has
talked about the developing of the political institutions in the recent age. The article has
talked about the relationship that exists in between the changing location of America within
international economy and that of state system. The article is useful as it harps on how the
domestic policies of America are derived from exigencies of that of international system. The
value of the article is in the fact that it has can help in the stimulation of the systematic
inquiries and trigger the speculations regarding the evolving role of America in the present
age.
Carballo, J., Handley, K., & Limão, N. (2018). Trade cold wars and the value of
agreements during crises. VoxEU. At: https://voxeu. org/article/trade-cold-wars-and-
value-agreements-during-crises.
The author of the article is Jeronimo Carballo who is the Assistant Professor of the
Department of Economics within the University of Colorado. The other authors are Kyle
Handley along with Nuno Limao. Kyle Handley is the name of the Associate Professor of
Business Economics and Public Policy from the University of Michigan. The article has said
that the economic downturns can act as a cause and effect pertaining to the uncertainty. The
article discusses that the tariff threats can help in increasing the uncertainty in the trade policy

3US AND CHINA TRADE WAR
and it can pave the path for the reduction of trade. The reductions made in the trade policy
uncertainty with the help of the WTO commitments can encourage the firms of investing so
that it enters the new markets. The strength of the article resides in the fact that it has talked
about how the international trade can act as a avenue that can help in the exploration of
interaction in between the policies.
Handley, K., & Limão, N. (2017). Policy uncertainty, trade, and welfare: Theory and
evidence for china and the united states. American Economic Review, 107(9), 2731-83.
The authors of the article are Kyle Hindley along with Nuno Limao. The article has
talked about the effect of the policy uncertainty on the elements of trade, prices along with
the real income. The effect of the policy uncertainty can be understood with the help of the
firm entry investments in that of the general equilibrium. Accession reduced US threat
pertaining to trade war that accounted for more than one-third of export growth in between
the years 2000-2005. The findings of the article reveal the fact that there are large effects of
that of policy uncertainty on that of the economic activity. The article has talked about the
fact that the Asian countries would suffer most on account of the trade war. The value of the
article lies in the fact that it has negative implications for the international trading system.
Gompert, D. C., Cevallos, A. S., & Garafola, C. L. (2016). War with China: Thinking
through the unthinkable. Rand Corporation.
The article has been written by David Charles Gompert who is a government official
of America who has served as Director of National Intelligence. The article has discussed that
the improved military capabilities of China suggest the fact that the United States cannot gain
the operative control and destroy the defences of China. The article has stated that the
international forces can help in favouring the United States. The favouring pertaining to US
East Asian allies can hurt the military chances of China. The article has stated that NATO can

4US AND CHINA TRADE WAR
play an important role in neutralizing the Russian opportunities threats within Europe. The
article has said that the United States should be instrumental in making the sensible
preparations that can help in waging war with that of China.
Wallin, E., & Åström, E. (2018). " Trade wars are good, and easy to win": A study of
Trump’s steel tariffs and international trade.
The article talks about the fact that free trade can be said to be the optimal trade
pattern that can help in increasing the element of welfare. The article has found out the
essential fact that a foundation of global trading system can be said to be the dispute
settlement and the World Trade Organization can play an important role in contributing to the
economic stability in the world. The value of the article resides in the fact that it has talked
about basic trade theory and how the trade patterns can be explained with the help of
international differences in relation to the production costs. The strength of the article lies in
the fact that it has been able in deducing how the domestic prices of the steel would increase
alongside with tariffs along with the quotas. The tariffs can result in the American domestic
production of moving out of the country.
Theconversation.com. (2019). US-China trade war is making China stronger. Retrieved
from https://theconversation.com/us-china-trade-war-is-making-china-stronger-118852
The article discusses how the policymakers of US were operating under assumption
that US is the technological superpower of the world and how the Silicon Valley was acting
as the seat bed of innovation. The US is lagging behind pertaining to the evolving of the
superfast internet technology. The American companies does not have the superior wireless
equipment and this has caused Donald Trump to start a war on the tech companies of China.
Huawei can be said to be product of the industrial policy strategy of that of Chinese
government. China wants to achieve the self-sufficient Artificial Intelligence which can

5US AND CHINA TRADE WAR
minimise the dependence on the other countries. The article has said how Chinese
government has been instrumental in introducing the new policies that have helped in
boosting the element of the domestic consumption.
Scmp.com. (2019). One country’s winning the trade war. It’s not the US and it’s not
China. Retrieved from https://www.scmp.com/week-asia/opinion/article/3017498/one-
country-winning-trade-war-its-not-us-and-its-not-china
The article has stated that the agreement in between Donald Trump and that of Xi
Jinping has put the tariff increase on hold and it has resumed the bilateral negotiations. It has
helped in marking the end of first round in relation to the US-China trade war. The aim of
Trump in declaring the trade war was the reduction of US trade deficit with that of China.
The trade deficit of US along with the rest of the world have continued to rise by that of US $
15 billion. Donald Trump has opened the hostilities that has caused the US trade deficit to
grow at a faster rate as compared to the economy of US. The value of the article lies in the
fact that it has rightly pointed out how the threat of the US driven shutdown can deter the
third-party countries from making use of Chinese kit within the important projects.
Bbc.com. (2019). US-China trade war in 300 words. Retrieved from
https://www.bbc.com/news/business-45899310
The article has stated how the president of United States has made complaints
pertaining to the trading practices of China. The article has said how the US has imposed the
three rounds of the tariffs on around $ 250 bn worth of the Chinese goods. The duties cover a
large range of products from the handbags to that of the railway equipment. China on the
other hand has hit back by the imposition of tariffs that range from 5 % to that of 25 % on a
large variety of the US products. The value of the article is in the fact that it has talked about

6US AND CHINA TRADE WAR
how the imposing of tariffs have made the products of US cheaper as compared to the
imported ones.

7US AND CHINA TRADE WAR
Bibliography
Amiti, M., Redding, S. J., & Weinstein, D. (2019). The impact of the 2018 trade war on US
prices and welfare (No. w25672). National Bureau of Economic Research.
Bbc.com. (2019). US-China trade war in 300 words. Retrieved from
https://www.bbc.com/news/business-45899310
Carballo, J., Handley, K., & Limão, N. (2018). Trade cold wars and the value of agreements
during crises. VoxEU. At: https://voxeu. org/article/trade-cold-wars-and-value-
agreements-during-crises.
Gompert, D. C., Cevallos, A. S., & Garafola, C. L. (2016). War with China: Thinking
through the unthinkable. Rand Corporation.
Handley, K., & Limão, N. (2017). Policy uncertainty, trade, and welfare: Theory and
evidence for china and the united states. American Economic Review, 107(9), 2731-
83.
Katznelson, I., & Shefter, M. (Eds.). (2018). Shaped by war and trade: International
influences on American political development (Vol. 79). Princeton University Press.
Li, C., He, C., & Lin, C. (2018). Economic Impacts of the Possible China–US Trade
War. Emerging Markets Finance and Trade, 54(7), 1557-1577.
Scmp.com. (2019). One country’s winning the trade war. It’s not the US and it’s not China.
Retrieved from https://www.scmp.com/week-asia/opinion/article/3017498/one-
country-winning-trade-war-its-not-us-and-its-not-china
Theconversation.com. (2019). US-China trade war is making China stronger. Retrieved from
https://theconversation.com/us-china-trade-war-is-making-china-stronger-118852

8US AND CHINA TRADE WAR
Wallin, E., & Åström, E. (2018). " Trade wars are good, and easy to win": A study of
Trump’s steel tariffs and international trade