What Is The Impact Of The US Trade War On China?

What is the general situation of Sino US trade? Sino US trade relations are very important for each other.

According to the situation in 2016, China is the third largest export destination in the United States and the largest source country of imports in the United States.

For China, the United States is China's largest export destination country, accounting for 18.5% of China's total exports and China's sixth largest source of imports.

According to the data in 2016, the US trade deficit with China is as high as 347 billion US dollars, accounting for nearly 50% of the total merchandise trade deficit in the United States.

There are three main reasons for such a huge trade deficit. One is the rule of economic and trade development; the two is the imbalance of Global trade rules and services.

Progress has been slow; three, the US has set up export restrictions on high-tech products to China, which has impeded the US's export to China.

How to fight trade wars? Sino US trade friction has been escalating since the 08 crisis.

According to WTO statistics, the United States initiated and implemented non-tariff trade barriers (NTB) as high as 2259 in 08-16, and 2067 affected by China. There were 99 NTB targeted specifically for China.

China's implementation of NTB is relatively small. In 08-16, China launched and implemented 1776 non-tariff barriers, 1682 of which were affected by the United States, and 46 were specifically targeted at NTB in the United States.

There are three possible ways for us to trade with China in the future: first, China is classified as a "currency manipulator".

In recent years, China's central bank has intervened in exchange rate to avoid depreciation of the renminbi, which does not meet the requirements of the US Treasury to manipulate foreign exchange rates, even if it does not affect China in the short term.

Second, as Trump said, 45% high tariffs on Chinese products will be difficult to implement under the framework of WTO, and large-scale trade wars will be unfavourable to China and the United States.

Third, the continuation of 08 years of measures, such as anti-dumping, countervailing investigations and other non-tariff barriers, this measure is more likely and universal.

Protection means.

How big is the impact? China's exports are damaged and the economy will be affected.

According to the four grades of 10%, 20%, 30% and 45%, we will measure the impact of the US tariff increase on China's exports, and China's total exports will be reduced by 1.1%, 2.6%, 4.1% and 6.4% respectively. GDP will be dragged down by 0.2, 0.5, 0.5 and 0.5 percentage points.

China relies heavily on computers and communication electronic equipment (56%), stationery, sports and entertainment products (30%), leather fur feathers and footwear (25%), clothing and apparel (24%), pport equipment (21%), metal products and machinery (21%), furniture manufacturing (21%) and other industries.

If the United States adopts dual countermeasures, it may mainly focus on miscellaneous products, chemicals, metals and products.

For the United States, simple trade protection may not bring about a return to employment, but inflation may rise rapidly.

If the import of cheap goods from China is restricted, American consumers may have to assume higher prices.

Inflation may rise in a short time.

So trade protectionism pushes us inflation much more than employment.

According to the statistics of The Conference Board, the labor cost of Chinese manufacturing units in 2013 was only 4.12 dollars per hour, which is 11% of the US, far lower than that of the United States.

So even if the United States limits imports from China, American businesses may not be motivated to produce these goods unless the US government gives support to tax and subsidies.

If the import of cheap goods from China is restricted, American consumers may have to bear higher costs and inflation may rise in a short time.

How can China cope with it? If the US provokes a trade war against China, China can take several measures to deal with it.

First of all, in the short term, China can take some counter measures to make the United States realize that trade war is bad for both sides.

US exports of aircraft, electronics and soybeans are highly dependent on the Chinese market. China can also raise anti-dumping duties or raise tariffs on these industries.

Secondly, China should speed up the pace of opening up the service industry. A major problem in current international trade is that commodity trade is liberalized enough, and the liberalization process of service trade is slower. Gradually opening up the service industry can introduce competition and improve production efficiency on the one hand, and on the other hand, it helps narrow the Sino US trade deficit and reduce the contradiction between the two countries.

Finally, China is the beneficiary of free trade. Under the background of the general rise of trade protectionism, it should shoulder the banner of free trade and continue to promote trade liberalization with the European Union and ASEAN economies.

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