Pros And Cons Of A Sino-us Trade War

- Aug 03, 2018 -

Pros and cons of a sino-us trade war

On March 23, 2018, US President Donald trump officially signed a memorandum of understanding on trade with China at the White House. Mr Trump announced on the spot tariffs on $60bn of goods imported from China and restrictions on Chinese investment acquisitions.The United States.

A trade war between China and the United States began. A trade war between China and the United States began.

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1. The trade war between China and the United States will impact the existing industrial chain in the Asia-pacific in the short term, but in the medium and long term it will be beneficial for China to adjust its industrial structure.

In the short term, China and the United States will both lose and be affected by trade wars. Other relevant parts of the Asia-pacific industrial chain will also be affected and need to make adjustments on their own.In the medium to long term, if the sino-us trade war continues, China may adjust its industrial and export structure, which is good for China.

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2. Currency devaluation

The launch of a trade war is definitely detrimental to a country's economy, and the strength and weakness of a country's currency largely depend on the country's economic conditions. Therefore, a trade war will bring adverse effects to the country's economy and also cause the devaluation of its currency.

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3. Reduced income

Trade wars lead to reduced income, mainly for people working in import-export related businesses or institutions.Once a trade war starts, neither the import enterprises nor the export enterprises will have a good time, and some enterprises that are not directly involved in the import and export will also be affected.However, once the business is in a bad state, it will naturally affect the income of employees working in these enterprises.

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4.Price increase

Higher tariffs are one of the main tools of a trade war because they can protect domestic products by effectively preventing foreign exports.But higher tariffs also mean higher import costs, which must be passed on to domestic consumers.

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