Question

In: Economics

What do we say? How the U.S-china trade war has escalated? How the trade war has...

What do we say?
How the U.S-china trade war has escalated?
How the trade war has played out?
What could be hit by the new tariffs?
Has the trade war hit the markets?
what other trade battles are going on?
winners and losers?
economic theories involves?
impact of this war?

Solutions

Expert Solution

Trade war escalates as Trump increases tariffs on Chinese imports.US president Donald Trump has said that he will increase tariffs on billions of dollars of chinese goods . This led to an escalation of trade war between US and China.

The trade war has played out because Trump says China broke the deal in trade talks.This increased the hostilities between the two nations before the negotiations could be made.China confirmed that it will retaliate if US incresaes tariffs on Chinese products. Why Trump says China broke the deal is not clear.However China said it always keeps its deal.

The new tariff will cost households $800 a year.US has imposed tariff on hundreds of  billions of dollars on chinese imports and China retaliated by imposing tariffs on wide range of US products.Both the economy will be hit by tariffs.The Chinese products hit by US tariff has been ranging from machinery to motorcycles.

The trade war has slowed down import export globally as business sentiment has been hurt.Trump extended trade war to other economies like Europe and Mexico. This had put more pressure in the financial market.The US -China trade war has brought uncertainty in  financial markets.

The US China trade war has a consequential  effect in the the global economy.It has weakened global expansion last year as the IMF has said . Some other indirect effects are that some countries which are trading partners of US and China or countries which play important roles in the supply chain are impacted .

After two yeras of rising tension, both the countries have signed a deal to ease trade conflicts.As a result Trump will be able to put trdae war behind him and concentrate on elections . So he is in winning position.China is also in a winning position because access to US financial and car firms will become loose.But US consumers and companies are losers because the deal will half tariff rate on only 120 bn worth of goods and most of higher duties remain in place.

Economic theories involves generalisation of relationship among the different elements of economic phenomena.

In US trade war has brought higher prices for consumers, struggles for farmers as well as problems for manufacturers. Other countries are also suffering economic damage.However some countries have been gaining because of increase in manufacturing .There has been instability in the stock market too.


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