China-US trade - Cooperation is the only right choice
Since the official launch of Sino-US trade in the last century, the bilateral trade friction has escalated. In 2017, Trump gathered the focus of Sino-US trade on the bilateral trade unbalance to provoke a Sino-US trade war. Since July 2018, the United States has increased tariffs on China's goods which worthen 34 billion US dollars and 16 billion US dollars respectively. The Chinese side has also given the same counterattack and add equivalent tariffs on US products in this situation. The bilateral trade wars have officially kicked off. In order to figure out the effect caused by the trade war between Chinese and American on the economy, it is necessary to explain the questions as follows. What is the trade war between Chinese and American, analyze why there are so many trade conflicts? Which area will be affected by the trade war mostly, how much effect will bring to these areas and what the further economy situation? Will the trade war will consist for a long time and who will be the winners in this trade war? We must understand these issues to understand the Sino-US trade war and analyze the impact of trade wars and possible future directions.
The two causes of the Sino-US trade war can help to understand what the trade war it is. The first cause is because Sino-US trade deficit persists for a long time, Small friction eventually caused a large trade war today. China as the largest trading partner of the United States, Sino-US trade deficit has been expanding in recent years, which has become an excuse for the United States to often create trade frictions. In 2017, China's trade surplus with the United States increased by 10% from 2016 to reach US$275.8 billion (Kimberly, 2019). This growing trade balance has attracted the attention of the US government. In order to prevent the trade deficit from continuing to expand, the US government began to impose sanctions on Chinese goods. The second cause of the trade war is because America government worries about China's peaceful rise. Along with the improvement of China's economic strength, China is no longer satisfied with the status of "world processing factory" and has begun to change from "Made in China" to "Create in China", and its international influence has been continuously improved. As China's international influence has increased, its global status has been continuously improved. This has also squeezed the international space of the United States to a certain extent, which has caused concern and resistance in the United States. Especially in the field of science and technology, the US government is particularly concerned about China's theft of intellectual property rights.
Figure out the characteristics of Sino-US trade war also very important to understand what the trade war it is. For one thing, Trade friction patterns are diverse, and the damage is large. In the last century, Sino-US trade frictions were mostly solved by common means, such as anti-dumping and countervailing. Today, the Sino-US trade war is gradually diversified, and the United States has formulated targeted sanctions based on China's actual trade situation, and the amount of sanctions is huge, in order to achieve the goal of "direct hitting the key" (Kimberly, 2019). These two countries now impose sanctions on tariffs on specialized products. Today, the volume of two trade transactions is huge. Such sanctions will cause huge losses to both economies.
For another thing, there is a big difference of the field trade friction occurred between China and American. Sino-US trade has great complementarity. When conducting bilateral trade, it can better meet the needs of some countries for some special products. The Chinese import a large number of agricultural products, and the US demand for Chinese products is concentrated in primary processed products, metal products, daily necessities, etc.
After knowing what the Sino-US trade war is, we can know this trade will bring a lot of effect, especially in agriculture area. China is the world's largest consumer of soybeans and the world's largest importer of soybeans, mostly relying on imports from the United States, Brazil and other countries. Beginning in March 2018, the United States launched a trade war, imposed tariffs on Chinese exports to the United States, and then China adopted tariff counter-measures against the United States. The soybean industry was the first to bear the brunt and imports were suppressed. For China, the price of domestic soybeans in China will increase significantly. China's implementation of tariff counter-measures against the United States, soybean import tariffs increased to 25% to the United States, if the continued import of soybeans from the United States, china will face high tariff costs and the Chinese soybean market price rise. For the United State, if Chinese soybean import dependence turned to South American countries, the reduction in soybean exports will result in nationwide slow-moving soybeans. This will impair farmers' interests a lot and reduce labor enthusiasm (Dickler,2019)
Not only the agriculture area, the trade war will also affect mostly in gas and oil industry. On May 19, 2018, China and the United States issued a joint statement on bilateral economic and trade consultations in Washington. The two sides agreed to meaningfully increase US agricultural and energy exports. It is of strategic importance to use oil and gas trade as a lubricant and breakthrough to ease trade friction between the two countries. However, with the start of the Sino-US trade war, the oil and gas trade negotiations have also been stranded, and the cooperation that has already been negotiated will be abolished.
For The future of the relationship between China and America, nobody wants this trade war to consist for a long time. Recently, the leaders of China and the United States met and reached a consensus, stopped upgrading trade restrictions such as tariffs, and negotiated in the direction of stopping tariff increases. At the same time, China promised to expand imports according to the needs of the domestic market and ease trade imbalances. Chinese government agreed to reduce the tariffs on imported cars in the United States. So far, the escalation of trade friction between China and the United States has come to a temporary end. The Social mainstream paradox all insist that there will have no winners between China and America (Silvia, 2019). Win-win cooperation, not war, is everyone's expectation.
Work cited
Kimberly, Amadeo. "Trade Wars and their Effect on the Economy and You." The Balance. 25 June 2019.
Jessica, Dickler. "What the trade war will cost you -- and what items you should consider buying now before prices go up." CNBC. 15 May 2019.
Amaro, Silvia. Even If US-China trade war goes on, Europe might be a winner. CNBC. 18 June, 2019.