US Trade with China: Pros and Cons

To constructively engineer the threshold of this scholarly piece, it's quite apt to quip that trade which ordinarily means buying and selling is the heart of every nation and country. It is so germane for the growth of any Country, that's the reason it can be noticed that the countries that are dominating are actually countries that are well established in commerce. Seeing then the salient vitality of trade, over the years there has been a 'trade war' and of course, this trade war has reverberated on global politics in no small measure. Hence, this paper accords the privilege to have this topic distilled and jurisprudentially fine-tuned

Sequel to this, it is an undeniable fact that no nation can actually exist independently of the rest because everyone relies on the other for technological, material, and even Intellectual importation, and it must be stressed that not even the acclaimed U.S.A. exists independently of international interaction. In lieu of this, it is apparent that trade actually comes to the fore in other for each nation to exchange its legal tender for commodities.

At this juncture, it is applaudable that swift attention is given to the political underpinning of international trade. Even before nation A trades with nation B, no matter how much A needs the commodity from B, the latter must be in political Concordia with the former. Hence, it's not an overstatement to say the biggest molecule in trade is the political factor.

Before further procession in this very resourceful and realistic piece, the term trade war should be given intellectual demystification; trade war in International Law is a political cum economic situation of hostility between two countries that fire up policies against the product of one another in each of their countries.

Over the years and even at present, the prime countries whom everyone is interested in their trade war are U.S. and China. This is no longer news to anyone who is internationally aware of current events. Actually, this war has been from years back. Throughout history, trade wars have been hardly uncommon, with numerous precedents between the US and China. To date, the US has launched five ‘Section 301' investigations’ against China since 1991, probing into areas of intellectual property rights, unfair trade barriers, and clean energy[footnoteRef:1]( Understanding) [1: Understanding China-US Trade War; Causes, Economic Impact and the Worst-case Scenario by Terence Tai-Leung Chong and Xiaoyang Li]

America as a country has been feeling intimidated by the sudden rather than gradual rising into dominance in trade. According to Comtrade (2018), in 2017, the US trade deficit with China increased to $363 billion, the highest bilateral trade deficit on record. It represents 42% of the total US trade deficit of $861 billion. And President Trump is trying his best possible to get rid of the trade deficit encountered by the Country, this has been the reason the US has been levying a heavy tariff on Chinese products. Hence, the reason for US protectionist measures as well as China's retaliatory[footnoteRef:2] [2: Comtrade]

Save your time!
We can take care of your essay

• Proper editing and formatting
• Free revision, title page, and bibliography
• Flexible prices and money-back guarantee

Place Order

On this note, it behooves to note that, stringent tariff plans in the international economy are most times levied to discourage the products from a Country so that the latter will pay an unnecessarily higher price to get the goods in and as a result, would need to hike the price after the goods are in... These unavoidably hiked prices by the former would frustrate the consumers of such products and at the long run; the latter would be more frustrated to trade with such Country. Such tariff increment in this case was borne out of political insecurity and commercial intimidation.

America as she is doesn't want to lose her as the World Power to China and she actually has all the reasons to do that. Recently, the Chinese Government made a vision for China 2025 with one of the aims being that the Yuan would be the most valuable currency in the world currently China has received the Most Favored Nation status which poses clearer competition with America's dominance. Out of the 3 trillion that America gains in a minute, China has a 200 billion- 47% deficit[footnoteRef:3] [3: Youtube.com/David Pet-David/ Valuetainment/ Trade-war]

After two years of practical hostility, China and US agreed to sign 'Phase One Agreements' where China halved tariffs on 1,717 goods she imported from the US and boost them by $200b. A closer look at China’s net exports reveals that a significant portion of them comes from the trade surplus with the US. The reliance on US trade leads to concerns that China might suffer substantial losses from the trade war. This uncertainty weighs on market sentiments and results in capital flowing out of China, which in turn suppresses its asset prices. Some journalists and commentators also suggest that the China-US trade war might eventually evolve into a new Cold War, which will severely imperil the stability of the global political and economic environment[footnoteRef:4] [4: Understanding China-US Trade War; Causes, Economic Impact and the Worst-case Scenario by Terence Tai-Leung Chong and Xiaoyang Li]

Now shall proper attention be given to the political side of the whole trade war, because it has been said that really more often than not, the real motives behind a trade war are beyond economic reasoning while they appear to be related to economics, they are in fact politically driven[footnoteRef:5] America has always been positioning itself as the World Power, this has been seen so many times where anything had gone wrong and America would send troupes to such locations? However, on the other hand, countries like Russia, Japan, and China are making headway in technological advancement and commercial dominance, but the most threatening of them all is China. It is no hidden truth that America is afraid of how China might later come to take her place in global politics and all… And of course, it should be borne in mind that as this war started in 2018, if it is not properly curtailed, it would lead to a full fledge war, which would have another drastic impact on global friendship and even global health, or has the bombing at Hiroshima and Nagasaki hastily forgotten? [5: Understanding China-US Trade War; Causes, Economic Impact and the Worst-case Scenario by Terence Tai-Leung Chong and Xiaoyang Li]

China from her side is vehemently making moves to totally dominate the world economy, even now; the Chinese Yuan is being preferred at the exchange table gradually. And strangely, statistics and intelligence report has shown that ever since the beginning of this trade war, both countries had started plumbing more funds for military and technological research. Meaning that both countries are at the shells ready to drop bombshells at the slightest moment… All this plumbing of more funds into security came about as the trade war is being cultured, hence, it is obvious that the trade war has a resounding effect on global politics.

On this political note, it is noteworthy that the successful buoyancy of China despite harsh measures of America is already making certain nations who depend on America economically and politically see the possibility it can be done without as China is currently doing… So it is apparent, that really, this trade war though mumbling voices in the economical room, is echoing in thousands of decibels in the whole estate of politics.

After much-intensified research, the major solution to this Trade war is that given by Gene and Elhanan[footnoteRef:6]. This has of course proved to be efficient right from time; the shadows of these conflicts in the 90s were solved by diplomatic means. First of all, Stiglitz had submitted that actually the US deficits are caused by low savings; therefore, the solution is to increase American savings[footnoteRef:7]. Hence, it is the submission of this paper that the only solution which would save the world from a real war is for the two to seat at a table and settle scores and interests, fine-tune everything man to man. [6: Trade Wars and Trade Talks by Gene Grossman and Elhanan Helpman] [7: Joseph Stiglitz, “The US is at Risk of Losing a Trade War with China”, Project Syndicate, July 30, 2018, https://www.project-syndicate.org/commentary/trump-loses-trade-war-with-china-by-joseph-e--stiglitz-2018-07?barrier=accesspaylog]