As of right now, China is getting a very big lead in the trading war for operations and intellectual property theft. Many countries more like Asian countries are getting a very negative impact from this, as many are set up in trading with China and the U.S. In 2018 the U.S. did put the first round of tariffs on China, which then led to four subsequent rounds of other tariffs to follow. There is big friction in China and America’s trading war that doesn’t just affect these two places but affects the others trading around them since they are the two powerhouses of the trading industry. 

Since then, the U.S economy has been negatively affected by the Chinese trade war with the effects being astronomical. A September 2019 study by Moody’s Analytics found that the trade war had already cost the U.S. economy nearly 300,000 jobs and an estimated 0.3% of real GDP.  The goal of the trade war was to get businesses to come back to the U.S and not leave China, but the overall effect was just to the benefit of China. U.S. companies and consumers are the ones primarily paying for the U.S. tariffs implemented on China with the cost estimated at nearly 46 billion for consumers as of January 2020. Not only was the everyday U.S. consumer greatly affected by this trade disagreement but also many small businesses. In an attempt to fix the unfair trade situation the Trump Administration implemented a deal that China would agree to state that China would deal with 200 billion dollars worth of imports from the U.S. However, due to covid and under circumstances the deal was only met to 57 billion dollars in trade, not even close to what was provided in the deal. Other methods to solve this trade crisis can be found, however.

There are many things we could do to help solve this problem slightly. We definitely wouldn’t want to start a trade war. There wouldn’t really be a good outcome either way.  So first putting a stronger barrier on foreign companies in China. What we would do is put a stronger barrier. Doing this would then help bring down this corporation tax and wages for China, which would then cause a harder time for people to work in China, meaning many of the taxes would go down helping us get back in the lead.   If we decreased this it would continue to move up and give them a strong percent in the corporation tax. So that is why there would be an increase and a decrease in their foreign companies. Another major thing we could do to help China to be pushed back would be a stronger Anti-dumping duty. What is Anti-dumping? Basically, it is when a country has a policy against other countries’ products. meaning they will not accept damage or being ripped off in the trade. This also means they will not accept exports from China that would damage their own manufacturing industry. There are already two countries that have pushed this on China which are Indian and European countries. By doing this we could help further our industries instead of them being very reliant on China’s trading. Now with us putting a hold on China’s restricted exports, it will give us major room to grow and get out there to other places.

This is a submission from FS 19: China’s Past/Present and America’s Responses.