Issue Brief on “A Looming Trade War Between China and USA”

During his election campaign, the US President Donald Trump made some alarming statements. One of them was about threatening China against a 35% to 45% tariff on all imported goods from the country, which he also said would not be “willy-nilly.”[1] Trade sanctions against China were a cornerstone of his election campaign. He went on to accuse China for being the biggest currency manipulator, which is ripping the US economy apart.  Mr. Trump’s unexpected policy moves have already unnerved the global structure and Sino-America trade war will present a very significant turning point in the global economic facade.

The American and Chinese economies are intricately dependent on each other. The US goods and services trade with China totaled an estimated $659.4 billion in 2015 and exports were $161.6 billion, while imports were $497.8 billion. The US goods and services trade deficit with China was $336.2 billion in 2015. China is currently the US’ largest goods trading partner with a $598 billion in total (two way) goods trade during 2015.[2] This shows that US and China are bound in economic co-dependence.  They have both become increasingly reliant on each other for sustainable economic growth and anything that happens between the two countries would send shockwaves across the globe as the countries have increasingly become dependent on each other for trade benefits.

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