How much trade cost will the ongoing US-China trade war generate for global value chains?
Journal Contribution ResearchOnline@JCUAbstract
[Extract] The United States (US) and China represent the two largest economies in the World. Since China first entered the World Trade Organization (WTO) in 2001, its bilateral trade with US has grown exponentially, reaching 660 billion US dollars (USD) by the end of 2018 (United States Census Bureau, 2022). Despite the significance of this trade relationship, the nature of the trade activity was much lopsided, with the US incurring a large and ever-increasing trade deficit with China. By 2016, this deficit had reached 347 billion USD (USCB, 2022) and was a major political issue of the 2016 US presidential campaign. During the latter, Donald Trump led a strong campaign which sought to rectify this deficit, claiming that China was taking advantage of unfair trading practices, such a lack of market access for US businesses and intellectual property theft (SCMP, 2020). Once in office, former US President Trump engaged in an aggressive new trade policy regime, which sought to increase tariff levels in sectors that were of strategic importance to China, such as cars, hard disks, and aircraft parts (SCMP, 2020). Since the China-specific tariffs were first implemented by the US on July 06, 2018, the US and China have been embroiled in an escalating series of four additional tit-for-tat tariff rounds. Against this background, this blog post tackles the question: How much trade cost does the still ongoing US-China trade war generate?
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Sustainable Global Supply Chains
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November 30, 2022
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5
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