Question

What do you think are the effects of the current trade conflict between the

U.S. and China on multinational corporations and business?

Answer 1

Trade War going on between US and China will have devastating effects not only for the two countries but for the whole world. Trade War started with US increasing its tarriffs on products coming from China. China retaliated and increased its tarriffs on goods coming from US .This continued despite of talks between the two countries and WTO warning that the conflict will turn into trade war.

This will effect the US and China's economy as less exports would lead to less production and less employment. This could also affect other countries as they will try to stop dumping those products on which tarriffs have been raised into their country. One example of this is India who increased its anti dumping duty on steel imported from China. The effect on BOP of US would be positive as less imports will improve current account but with China retailting effect is unclear. Other countries could take advantage of the situation by capturing the market. This also gives the chance to improve domestic markets.