China and US Trade (Essay Sample)

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China and the United States Trade
Tariffs are fixed prices that are imposed on a particular class of imports or exports. According to Lawrence Duke, the benefits of the duties are evident, but the costs are hidden. The majority of the consumers are ignorant about the impact of the tariffs on their purchases. The trade deficit has become a significant challenge to the majority of the countries; this refers to the difference between exports and imports in the two nations. Recently, there has been a China- U.S trade war, which has emerged primarily because the United States government is using the tariffs to reduce the country’s trade deficit with China strategically CITATION Law19 \l 1033 (Duke). Even though negotiations on how to pull down the gap are ongoing, President Trump suggested that he would delay the tariffs on China with effect from 1st March. The paper highlights significant issues that have caused the China- U.S trade war and its impact on trade and future relationships of the countries.
The majority of the countries engage in exporting to expanding their market size and profits for their businesses. The large firms proactively explore new exporting opportunities while the small firms become intimidated by the complexities of exporting CITATION Ari \l 1033 (Arizona State University). In the trade war between China and the United States, China has a trade surplus of $540B, while the United States has a deficit of $120B. The situation shows that China is exporting more to the U.S than it is importing, thus causing an economic conflict. The United States is using tariffs to reduce the trade deficit it has in China. However, the strategy could widen the deficit in the short-term. The impact will be felt more by the consumers.
In the trade war, America is believed to have more power if it settles to use the tariffs as its economic weapon. Imposing taxes on Chinese products will make the prices of their items to rise in the United States. The majority of the consumers will switch to purchasing the local products of the American manufacturers. The cheaper competition by the Americans will increase revenues in the manufacturing companies, whereas China will experience a decline in their sales CITATION Pau191 \l 1033 (Huang). China responded to the decision by suggesting it will also impose tariffs on American stronghold imports such as soybeans. The majority of economists discourage the use of tariff wars in solving trade conflicts because the consumers are the most affected by the high prices, and businesses operating with imports from either country are likely to experience a shake-up in the operations.
According to Solman, China is at a more significant disadvantage compared to the United States. The trade share of the Chinese GDP is significantly higher than the U.S. Secondly, the Chinese exporting industry is the primary source of employment,