TRADE BETWEEN US, CHINA, AND JAPAN

TRADE BETWEEN US, CHINA, AND JAPAN

Introduction

Trade is essential part of world economic development and due to globalization and other factors various countries form relationships which are purely business oriented. The investigation of trade between United States, Japan and China reveals a dependent relationship that support maintains the three countries at the top of world economy. Presently United States and china are in trade conflict due to difference in economic interests. Japan export substantial amount of its resources to China which is stable and promising to counteract the American declarations.

Japan is ranked fourth in world economies and is likely to be affected by the tension between the United States and China because of weak trade flows. Presently the trade wars may cause a slowdown resulting from the trade dispute between the United States and China, Japan will be negatively affected. Japan is one of the leading economies in Asia which exports their merchandise to China and America (Baldwin, & Lopez‐Gonzale, 2015). If China is affected, the Japanese will have the opportunity to increase their supply and they are considered to be the biggest foreign influencer in Chinese value-added exports which are taken to the United States. The slowdown in the trade flow between America and China will make japan exportation of goods will be vulnerable. However, analyst says that the extensive effects on the Japan GDP utilizing spillovers from the supply chain are going to be minimal. Analyst predicts that initially the China and Unites States conflict will have minimal impact on Japan; eventually it will impose threat the economic environment (Eaton, Kortum, Neiman, & Romalis, 2016).

Both Japan and China have focused on export-oriented strategies for trade growths and they have large economies which have imbalanced bilateral trade. However, the United States is restoring the reciprocal market availability bargain. The United States minimizes the imbalance by implementing goal-oriented policies which minimizes America’s importation of merchandise especially from China. Presently the friction between China and America is considered to be severe than the case of Japan in the 1980s to 90’s (Binchang, Wanping, Siyuan, & Jie, 2017). China is capable of initiating retaliation actions by it while Japan relied on its relationship with the United States for national security and have declined to take any counterattacks. China depends heavily on exports to expand its economy and the products and services that the country exports contribute to twenty percent of associated GDP. Due to current disagreements (Dean, Lovely, & Mora, 2017).

China and Japan are considered to be the world’s 2nd and 3rd largest economies globally with approximated 350 billion dollars’ worth of merchandise between each other annually. Japan has been struggling to overcome economic funk for over two decades and their relationship trade wise has assisted them while Chinese on their side is concerned with the importation of manufacturing expertise and electronics plus machine merchandises to the world (Van Marrewijk, 2017). Research studies indicate that Japan exports advanced products to China on a large scale that is capable to support its economy. The United States is not interested in exporting industrial equipment’s, which constitute part of the risks that business organizations will lose their competitive advantage through exportation of expertise.

Conclusion

This paper provides an investigation into trade associations between three countries which are the China, the United States and Japan. The three countries are considered to on the top list of world economies. Their business setting has various rules and restrictions which through globalization enable them to have trade relationships. Presently the United States is in trade conflict with China which is also affecting Japan.

Reference

Dean, J. M., Lovely, M. E., & Mora, J. (2017). Decomposing China-Japan-US trade: Vertical specialization, ownership, and organizational form. In International Economic Integration and Domestic Performance (pp. 119-132).

Baldwin, R., & Lopez‐Gonzalez, J. (2015). Supply‐chain trade: A portrait of global patterns and several testable hypotheses. The World Economy, 38(11), 1682-1721.

Binchang, D. O. N. G., Wanping, Y. A. N. G., Siyuan, N. I. U., & Jie, H. E. (2017). The Influences of Technical Trade Barriers on Sino-Japanese Bilateral Trade. Journal of Management, 3, 003.

Van Marrewijk, C. (2017). International trade. Oxford University Press.

Eaton, J., Kortum, S., Neiman, B., & Romalis, J. (2016). Trade and the global recession. American Economic Review, 106(11), 3401-38.