Question

Trade War on Developed Markets is a topic of current event occurring in the business domains.

Need to write a 2-3 pages about this war and how this can affect the economy of business?

Here some questions to help you think about the topic but you can write your own thinking and what you think will affect the economy of business....

us china trade war impact on global economy

Trade war? No trade war? Does it matter? Why should we care?

how this current change economics?!

What caused the US China trade war?

Why China’s Trade War Is Now Seriously Threatened?

Does War Help Economy?

How does a trade war work?

When did the Trade war start?

how this current events affect Business!
what is good side?
what is bed side?
why it is affecting the economy ?
Who is controlling this war?Do trade wars even work?

Why a trade war can’t be won?

etc.....?!

Answer 1

ANSWER:In general terms trade war is defined as an economic conflict resulting from excessive protectionism in which states used to raise tariffs or other non tariff barriers against each other.Trade war can be of various types like:

1 Currency war

2.Customs war

3.Economic sanctions

4.Economic warfare

Reasons and purposes of trade war some times can be simple like Economic competition between nations but at the same time hidden purposes can also be there like various Geopolitical ambitions, competition and conflicts. Sometimes it can be resultant of Ego clashes among nations.

Out powering other nation via trade tactics is not a new phenomenon its was widely prevalent before the time of WW2 and in fact it played important role in causing WW1 and after that also "beggar thy neighbor" policy was used to be effective tool in determination of international relations among the nations.After the huge destruction caused by two world wars then world leader were reached at the consensus that to avoid another destruction it is must enhance the interdependence of countries on each other.Hence various world organisation were created like IMF to maintain exchange rate stability in international market, World Bank to ensure economic and social development,GATT and then WTO to ensure free and fair trade practices in world.

It is often been questioned that whether Trade Wars can be beneficial or only produce harmful results for world economy in general and for the countries involved in it particular.

It can be matter of debate because answer can be find in the purpose of initiation of trade war if it was started for:

1. Gaining economic benefits at the cost of loss bear by other nation.

2.Accomplishing certain geopolitical benefits.

3.Satisfying Ego war, and proving its importance in the global plate form.

Now let us specifically talk about the Trade War between US-China and try to analyse it on various above mentioned parameters then we,ll analyse whether it is doing good or bad for world economy, world businesses.

This trade war can not be only seen as war for economic benefits or loss, no doubt it is one of the important reason in its initiation.It can be divided in different aspects:

1.Economic aspect: China is US's major trading partner and having trade over $550 billion with trade surplus in favor of China.Obviously US will have certain reservations on it because China has grown and is growing exponentially, has become 2nd largest economy after US.Yet still it is reaping various benefits under the tag of a "Developing Economy".After negotiating on various front  (like to open its market in real sense fro US exports,leaving its practice of manipulating currency via devaluation of Yuan)  with China and at last not getting any positive results of it.At last US started doing tit for tat by imposing tariff's on China's import to US.

2.Another very important aspect is Geopolitical that is currently US is a super power but according to reports China is growing rapidly and expanding its footprints in world's different areas like its Belt and Road initiative, establishing foreign military bases like one in Djibouti,Its control on the establishment in North Korea and many more.

But as we know China's economy is in complex interdependent with US's economy hence by restricting its import US can make it possible to get its support on matters like resolving issues with North Korea etc.This can probably be a positive outcome of this trade war.

How this trade war is effecting global economic system:

According to recent reports of IMF and World Bank this trade is effecting adversely on various fronts like its is:

1. affecting global supply chains.

2.World Economy is expected to face further a slow down due to this.

3.Manufacturing in China has already started showing signs of slowdown and as various global companies has their units in China will try to search other destinations for their units.

4.3rd outcome will lead to gain to other emerging economies like Vietnam, Bangladesh, India as they will get new opportunities for manufacturing units.

Having said that it can not be ignored that Trade wars do more harms than good for global economies and businesses because there will always be chances of change in rules for import, export and other related parameters and businesses can not flourish in unstable situations.