Question

What are the economic justifications of the trade war? (the U.S. & China's trade war that is going on)

Answer 1

US-CHINA trade war had started h when Trump took its position, he was having a keen eye on Chinese imports which China sales in US global market and makes US goods costly comparatively in the US market itself, creating a problem for US firms. That was the reason for US imposing great tariffs on Chinese products and making US goods cheaper in the local market.

Tariffs imposed to china in 2018 - $250bn

Exported goods from china - $539bn Total deficit to US is 539-120=$419bn

Tariffs imposed to US in 2018 - $110bn

Exported goods from US - $120bn

From here we can see that US have exported just $120bn worth of goods and in return they faced around 95% tariffs. If we compare from this scenario, US should impose more tariff on china. I think US imposing tariffs on chinese goods is a good idea because US have become dependent upon chinese products in past few years, it is a good step for US economy in long run. US officials are not afraid of rising prices by imposing tariffs on china because it will benefit the US economy in long run.

US officials cleared that the tariffs revenue which they will collect will be invested in US agriculture sector thus helps the poor and needy in the economy. If US impose tariffs, then chinese goods will be costly in US market, helps increasing demand for US products, increasing employment level(which is already at century high), increasing GDP(which is growing at 3.5%). In total it will help the US economy and making goods costly for US and China both.

If both countries impose tariffs they will try to regain the loss from any other country and try to increase its prices while exporting to any other country. It could lead to increasing prices worldwide for consumers. There are no indication of ending this war. It totally depends upon who ends first, but neither US nor China gives indication of ending this out.