US-China Trade War Redefined

The recent trade war between the US and China is simple to understand. What were the USA’s goals to initiate it? How much did it succeed to achieve these goals? And which country gained maximum benefit with all this exercise? We will discuss all these matters here in today’s article.

Trade war looks like a new tactical tool to increase influence over rival countries. The world is reigning in globalized order. No country can survive alone. All are connected with each other somehow in different ways. Be it global chain system, brain drain, or internet connectivity. 

Understanding Trade War

Let’s understand the trade war first. It’s like one country is massively importing its cheap goods to any country. And the importer country wants to lessen dependence on export goods. So it decides to increase tariffs or taxes on export items of importing countries. As a result of tariffs, items become costlier. The more costly things are, the more drop-down in sales in any targeted country. 

It is also important to see that trade war is not good for overall consumers. In the end, both countries’ GDP suffers declining. But it is far better than initiating nuclear war. 

US Aims With Initiating Trade War

We mentioned in our article the Chinese strategy of global trade. How China deals in global trade. Because of strategies like cloning, currency manipulation, and debt trap, the US initiated the Trade War in 2018. 

China is trying to be a superpower in trade and economics. No idea how much it is intended to be a military superpower. What worries the US is that it is losing its influence on the global stage. Whereas China is emerging. All the US intends, in my opinion, is to secure its label of being the sole supreme power on earth. The US is doing it by containing its rivals through different tactics including a trade war.

Read more: Is China Backed Digital Yuan A Massive Threat To US Fiat Dollar?

Losses Of the War

Trump initiated a trade war and the Democratic party supported that move. Massive developments occur in 2018 onwards. According to the Bank of Finland reports of November 2019. China suffered 1% GDP loss in that year. Similarly, the US also suffered major declining economic figures. US farmers bore heavy losses. As they were exporting Soybean to China. 

There are many American companies operating in China. Just because they have cheap labor there. Infrastructure and overall facilities are best. All these things lead to low-cost benefits in manufacturing. That is why China is considered the manufacturing hub of the world. 

All these companies also faced troubles due to the ongoing trade war between both countries. And many decided to shift to other countries like Vietnam, Thailand, South Korea, etc but not India. 

Gains Of the War 

America achieved some of its goals from these measures. In January 2020 China promised not to manipulate currency for cost benefits again. China also assured the US of giving strong legal shelter to intellectual property, trademarks, and copyright systems. It also declared that it will not force foreign companies to share their research before operating in China. 

After all these negotiations and promises, US-China reached a phase 1 trade deal. And they lowered tariff hikes as a result. Also, many countries shifted their setup from China to other regional countries. 

Beneficiary Of Trade War

Vietnam remained the maximum beneficiary of all this trade war. As it also supplies many raw materials to China for manufacturing. The trade war is again an option for the Biden administration. China is growing its influence with each passing day. All peaceful people urge the leadership of both countries. That peace must be secured in any competitional engagement. 

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