Question

discuss the possible reasons for the imposition of trade barriers between China and the US, and the impact this can have on the South African Economy

Answer 1

President Trump during his election campaigns complained against economic policies pursued by previous administration in the US. He has accused China of using unfair trade practices to increase its exports to the US. China has vehemently denied all the allegations. In fact it has warned the US of retaliatory measures if US were to pursue policies to put trade barriers on the imports from China.

The U.S. president went on to impose tariffs on the Chinese products and China retaliated. Since then the trade war has been going on between these two countries. China has accepted some of US demands and has promised to import $200 billion worth agricultural goods from the US.

Trade war between the two largest economies in the world will indeed have ripple effects on most of the economies around the world.

South Africa is reliant on a strong Chinese economy to export raw materials to the country. Many of the country's exports to China also include agricultural goods such as rice and textiles. The country's exports to China may fall down in case of prolonged trade war between the US and China which will deal a big economic blow to the already struggling South African economy.