Who would be harmed in a commercial conflict between the United States and China?

Tensions between the two countries announce the start of a global trade war

Who would be harmed in a commercial conflict between the United States and China?

Leer en español: ¿Quién saldría perjudicado en conflicto comercial entre EE. UU. y China?

Donald Trump has once again alarmed the world with his most recent comments on trade policy. The US president decided to withdraw from a trade pact of the Pacific, he has imposed new tariffs, and he has offered commercial retaliation, even to its allied countries.

The affirmations of the president of the United States have not been underestimated by the high international political positions. These leaders, including the managing director of the IMF, Christine Lagarde, have warned that a commercial conflict would threaten the recent recovery of the global economy.

Tensions between China and the United States

The nation that has been most threatened by Donald Trump's recent comments is China. In a speech, in which he presented his new national security strategy, Trump labeled the Asian giant as a "strategic competitor." In this sense, the possibility that China and the USA face a fierce confrontation in the economic sector is imminent.

Commercial tensions between the two nations had arisen in 2017, when Donald Trump authorized an investigation into the alleged theft of intellectual property and forced transfer of US technology by China, according to Reuters. On this occasion, the head of state argued that a theft of this type costs the United States millions of jobs and billions of dollars.

Consequently, on March 22, Trump urged the United States Trade Representative, Robert Lighthizer, to impose tariffs of an approximate amount of 60 billion dollars on Chinese imports. This measure would be aimed at compensating the damage caused by China to the US economy.

In addition to this, Trump also told Treasury Secretary, Steven Mnuchin, to propose new investment restrictions to Chinese companies. However, US companies such as Walmart and Amazon have warned that sanctions against the Asian country could raise consumer prices and affect the stock market.

This week, China is preparing to return tariffs with liens on US agricultural exports, The Wall Street Journal reported. This position contrasts with what was stated in January 2018, when Chinese government officials claimed that their country hoped to continue working with the US. UU in search of mutual benefit.

In March 2018, in the first session of the 13th National People's Congress, China's Trade Minister, Zhong Shan, said that his nation does not want to start a trade war with the United States, but that in case of confrontation, they would have to defend their interests.

Who would be harmed?

In any case, a trade war could harm the economies of both nations. In particular, the United States is susceptible to any retaliation by China on its Treasury bonds. While China, despite having the advantage of being the largest sovereign creditor of the US, according to data of the Department of the Treasure, could be affected before a situation in which its access to the North American market is restricted.

The position of President Donald Trump has shown that he wants to reduce the US trade deficit, resorting to protectionist measures. However, there is a limit on the tariffs that the nation can impose before reprisals arise from the rest of the countries of the world. United States seems to have exceeded that limit in a short period of time. According to figures estimated by Bloomberg Economics, a trade war could cost the global economy about 470 billion dollars by 2020.


Latin American Post | Gexania Umbria
Translated from “ ¿Quién saldría perjudicado en conflicto comercial entre EE. UU. y China?”

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