US AND CHINA INTERNATIONAL TRADE DISPUTES

US AND CHINA INTERNATIONAL TRADE DISPUTES

China and the US have been in serious disputes and disagreements in areas of international trade and commerce.  Present a background on the issue (how this come did about and the political positions on both countries), its macroeconomic consequences to both countries and perhaps the rest of the world.  I cannot just tell you what to say or what to focus on in this issue, but it is important for you to be thorough.  You put the paper together in your own creative manner because there is NO one way to present it.  However, the paper will be graded on its thoroughness and logical analysis and it must be free from grammatical errors.

China and the United States are some of the nations which are well known for their economic stability. They record a high GDP compared to the rest of the world. Apparently, most of the countries usually depend on products from these nations. Through international trade, a government is able to export the products which it produces in excess and then import the products which have a deficiency in production. The available products cannot accommodate the current population. Export and imports are usually facilitated by international trade. Some nations have promoted international trade by taking away the trade barrier in their borders. However, China and the United States have existing disputes and disagreements in the area of international trade and commerce (Hur, 2018).

Background on the Issue.

China and the United States are the two world’s largest economies. Comparing their GDPs, the United States has a larger nominal GDP while, on the other hand, China has the largest GDP measured in terms of PPP. Based on global consumption and production, the United States is the largest importer, and China is the world’s largest exporter. This is an indication that China produces more products. In the 1980s United States become China’s third-largest partner in trading. Over the years, china becomes the largest trading partner with the United States. Dispute instated the early 2000’s when Clinton’s administration accused the Chinese of failing to comply with the global trade rules. The blame game between the two nations grew until it becomes worse with Trump’s administration (Bouet & Laborde, 2017).

During President Trump’s political campaigns, he promised to make trade fairer for the United States traders. This accelerated the fight with the oldest America’s traders, such as China. President Trump’s administration imposed taxes on the imports from China and other neighboring nations. This was meant to encourage the United States consumers to purposely but local products instead of the imports. China accused America of the actions terming that as the most massive trade war in the history of the economy (Fetzer & Schwarz, 2019).

Macroeconomics Consequences.

Apparently, the escalating international trade disputes between China and the United States is a threat to the investors. The trade dispute between the two leading economy nations is believed to cut the global economic growth from the projected 3% to 2.5%. Imposing tariffs to protect economies as the United States implies has a financial cost of losing jobs and also leading to poverty. Many of the individual companies would be negatively affected by the international trade dispute between the two nations (Özer, 2020).

For instance, the manufacture of the vehicle largely depends on China for the market of its products, which is estimated to be $11 billion. The productions import cheap products from China. Besides, technology companies such as Apple have their space in China, and they sell and also manufacture. The United States only purchases 20% of its products, which means the rest 80% is consumed globally. Trade disputes will discourage mass production, and this will impact globally.

The trade fight between the nations would negatively impact the traditional sectors like agriculture. Many of the products which are communed by China are cut due to the imposed tariffs, many of the traditional industries are losing a tremendous amount of revenue due to lack of consumers.  For instance, the American farmers of Soybean lost a tremendous amount of money estimated $1.72 billion. This was contributed by the Chinese announcement they made on tariffs. Chinese taxes would be much devastating. The existence of the taxes translates that the farmers will have no need to produce more of their products since the international consumers would not be willing to purchase from them, considering the products will be sold at higher prices. Therefore, consumers forced only to consume their own, which is much cheaper (Özer, 2020).

International free trade is significant to nations. China and the United States have been trading together for an extended period of time. A large percentage of the United States products consumers have been United China. Even there are many of the technology companies which have space in China where they make and also sell their products. However, with the imposed tariffs, it would be tough for the nations to depend on each other due to substantially increased prices mutually. They are forcing most of the consumers to purchase from the local producers. This has an economic impact since most companies will be forced to reduce their expenditure by cutting a section of employees. This results in unemployment in the nation.

Concisely, China, and the United States have been trading for a couple of years. Considering that the two nations have leading economics globally, they have mutually benefited from an excellent international trade relation. The individual companies in both countries import and export, both cheap raw materials and also final products. This allows nations to produce more to accommodate global consumption. The introduction of international trade tariffs has negatively impacted the economy and trade of the two countries. Traditional investors such as farmers are counting losses, vehicle manufacturers, and also technology companies.

References

Özer, A. C. (2020). The Effect of the US-China Trade War on Global Trade. In International Trade                Policies in the Era of Globalization (pp. 56-70). IGI Global.

Hur, N. (2018). Historical and Strategic Concern over the US-China Trade War: Will They Be           within the WTO.

Fetzer, T., & Schwarz, C. (2019). Tariffs and politics: evidence from Trump’s trade wars.

Bouet, A., & Laborde, D. (2017). US trade wars with emerging countries in the 21st Century:        Make America and its partners lose again.