Question

Describe what has happened in this trade war between the US and China, both in terms of policy changes on both the US and Chinese sides. Then discuss what you would recommend the US do in order to get China to change its trade policies with the US, particularly in terms of the requirements it puts on US firms wanting to do business in China (give them their technology, etc) and in terms of creating a more balanced trade with China (no large surplus or shortages in imports versus exports).

Answer 1

Chinese import tariffs in the U.S.— and the retaliatory tariffs on American goods in China— have already cut bilateral trade. Economists believe that the spat could eventually decrease by hundreds of billions of dollars the worldwide gross domestic product (GDP).

More on: Trade China U.S. Mexico Vietnam That's because the U.S. purchases more Chinese products than any other nation, importing $540 billion worth in 2018. Low-priced products benefit American businesses and families, ranging from industrial machinery to consumer goods such as electronics, furnishings, apparel and toys.

Meanwhile, every year, U.S. exporters send products worth more than $120 billion to China's huge market. In specific, the U.S. automotive, aviation, and agricultural sectors have benefited from China's economic expansion over the previous few decades, and the U.S. government estimates that exports to China support more than 900,000 employment.

Some might come out on the sidelines of the trade war as businesses change manufacturing to prevent tariffs. Companies are looking for substitute nations instead of "conshoring" or bringing factories or farms back from China to the United States.

Brazil and Argentina. It is anticipated that South American soybean farmers will pick up the slack from falling U.S. soybean exports to China, historically the top destination for U.S. soy. As China moved its purchases to other providers, Brazil saw powerful demand for its soybeans.But the outlook for South American exporters has been clouded by other factors, such as Chinese goodwill purchases of U.S. soybeans in early 2019 and an outbreak of African swine fever in China, which has weakened demand for soy pig feed.

The United States’ southern neighbor competes with China, exporting many of the same types of goods to the U.S. market, so it stands to benefit from Chinese products becoming more expensive. And if the updated North American Free Trade Agreement (NAFTA) gets passed, it could give Mexico’s exporters another boost—a prospect now threatened by President Donald J. Trump’s plan to impose new tariffs on Mexico

The insistence that labor and environmental standards, for example, must be demanded from others with low standards because otherwise free trade would be “unfair” have long been exposed as unpersuasive.Our efforts to impose such norms on developing nations will not succeed in developing nations such as India and Brazil, which are bigger and economically more significant. These nations are fully democratic; they are no more dictatorships or human rights violators than we are. Indeed, India is a magnificent democracy within a democratic structure that has managed multi-religiosity, multi-ethnicity, and diversity. Its unions are also free; and its environmental movement is strong