Impact of USA- China trade policies on transnational co-operations 1

Impact of USA-China trade policies on transnational co-operations of upcoming

economies

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 Impact of USA- China trade policies on transnational cooperations2

Introduction

There have been trade policies including imposition of tariffs on imports from China and China

doing the same on imports from US. As a result, trump’s administration has already imposed

tariffs worth $ 250 Billion on imported goods from China and as a result, China has also

retaliated by the announcement of $ 110 billion on the imports from US. This particular war is

likely to have adverse effects on both China and America’s economy. The aim of this paper is to

outline the effects of the USA-China policies on business activities of transnational co-operations

in the emerging economies that depend on these two economies for trade.

Transnational corporations in the emerging economies are nimble and ready to take advantage of

the trade war that is going on between America and China. There will be a short-term and

midterm effect that the above trade policies will have on the adjacent economies; transnational

co-operations. China was importing huge amount of food products like rice and soybeans from

America but since the imposition of high tax, food processing companies in china has decided to

look for substitutes somewhere else. Thai sea food companies are reaping large from the war

since Chinese food companies are now importing from them. This has created large market for

their products leading to a boom in their business activities hence increase in profits. Low

income economies like Vietnam; Vietnam furniture industries have also got an increase in

market share in USA since they now export their products to USA.

In short transnational co-operations benefits through imports substitution in the short run and

production relocation in the medium term. In the short run, companies in America and china will

imports from the other countries that offer cheap products e.g. Malaysian electronic integrated
 Impact of USA- China trade policies on transnational cooperations3

companies, liquefied gas co-operations and communication apparatus manufactures have won

big by taking the advantage and export their products to the two economies.

In the medium term the economies will decide to shift manufacturing completely into the other

upcoming economies like Thailand to avoid the loss associated with the heavy tariffs hence it

will be a gain to the upcoming multinational co-operations in these economies.

Conclusion

The trade war between china and USA in the long run seems to be hurting all the two economies

and they imposed tariffs that has been done by the two governments need to be uplifted as soon

as possible to end the war so that normality can be attained. Id the trade war continues, the

multinational corporations will join the other upcoming economies which are in the end will not

provide enough market for the goods and services so in the end the issue goes back to the two

governments to solve their two issues so that the situation can go back to its originality.