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US-China trade war

US President Donald Trump has indicated he will steer the US economy toward protectionism.
This was increasingly seen by the worsening US-China economic relations which led to a trade
war. The administration of President Donald Trump imposed import tariffs of US$50-US$60
billion on a number of Chinese products entering America in an effort to improve the domestic
economy and reduce the trade balance deficit between the two countries. President Trump
announced increasing tariffs on imports to 15% on steel and 10% on aluminum. In addition to
imposing import tariffs, the US also plans to limit investment and take action against China at
the World Trade Organization (WTO) because it considers the country to be unfair in bilateral
trade. The Chinese government responded to US actions by increasing import tariffs of up to
25% on imported US products and will also bring this issue to the WTO. At the global level, the
trade war between these two influential countries could trigger a weakening of the world
economy.

Definition of Trade War

War refers to the occurrence of hostility or tension between the two parties. This war does not
only have to use weapons, war can also occur in an effort to maintain and maintain economic
stability in a country. For this reason, a trade war is an economic tension that occurs between two
countries that have previously cooperated with each other and are bound in trade relations.
In the economic dictionary it is explained that a trade war is an economic conflict carried out by
imposing import restriction policies on the two countries involved. These import restrictions
include increasing the price of import duties on goods, prohibiting certain goods from being
imported, making the standard of incoming goods very high, requiring re-testing and obtaining
additional certification for imported goods, and many more. The purpose of conducting a trade
war is to harm one country's trade with another. President Donald Trump's statement several
years ago regarding the escalation of import tariffs on various products from China, especially
aluminum and steel, sparked a trade war with China. Why is that? Because the US is the largest
market for steel and aluminum products from China. Simply put, China is a supplier of steel to
the US market. China also gave the same reaction, the country increased import tariffs on various
US products, especially soybeans, wine, and also fruit. For the US, China is the biggest market,
so the US is the biggest supplier country for these products in China.
Impact on the Countries Involved
The trade war that was carried out between the US and China actually took trade hostage
between the two countries. Apart from causing harm to the opposing country, this import
restriction is also detrimental to the domestic economy. Why? Due to the increase in tariffs on
aluminum and steel imports from China, the amounts of imports of these two products will
definitely decrease. In addition, these two types of products are becoming more difficult to find
in the US market. This of course hampers the production processes of various companies in the
US that use aluminum as well as steel as raw materials. Even if there is, the price must be very
expensive. The increase in raw material prices will clearly affect the price of the final product
that is ready to be sold. So, consumers who need these products must also be willing to be
affected, namely having to pay dearly for the products they need. Likewise with China, import
restrictions for various products from the US, specifically wine, soybeans, fruit, cars, planes, etc.,
will have an impact on China's domestic economy. The level of economic development and the
slow rate of inflation must be willing to be experienced by various countries involved in trade
wars. Then, who won this trade war? As we all know, these two countries both have very strong
economies. But if we compare between the two, China's economy is clearly stronger than the US.
In recent years, China has experienced very high economic development, which has made it a
country with a strong economy. In addition to carrying out domestic economic development,
China has also invested in several countries, such as Hong Kong, Australia, Pakistan, Singapore,
South Africa, Sri Lanka, Russia, Canada and Indonesia. Even though some of the products
needed by China are supplied from the US, in terms of quantity, the US actually imports more of
the products it needs from China. That means, the dependence of the US state on China is even
greater.

Impact on Other Countries

The perceived impact can be positive as well as negative. The positive impact is that other
countries have a good opportunity to become suppliers to countries involved in trade wars. The
existence of import restriction activities imposed by China and the US will have an impact on
limited products needed by the two countries. The increase in the price of import duties imposed
by the US on China will encourage China to look for other countries that can become suppliers
of the products it needs. It's the same with the US. Therefore, the trade war that occurred
between the US and China provided opportunities for other countries to enter the markets of the
two countries which were currently in economic tension. As a negative impact, the restrictions
on imports of aluminum and steel products from China by the US have forced China to look for
markets in other countries. That means, China will increase sales of aluminum and steel products
to several other countries, including Indonesia. This will certainly unsettle domestic steel
producers who previously dominated the domestic market. consumers in countries that are not
involved in trade wars will not be affected. Precisely with the entry of products from the US or
from China will give them many choices, especially in terms of price.

United States Trade War with China as a Challenge Asia Pacific as The New
Emerging Power

Asia Pacific has become The New Emerging Power on the stage international economy. The
situation in Asia Pacific after the economic crisis in 1998 showed significant developments from
a geopolitical and geoeconomic standpoint in the region. This area is also the target of two
competing countries The strongest economies in the world today are the United States (US) and
China. Asia The Pacific has become the largest import market and also the largest provider
for US energy sources where Asia Pacific is ranked first with the largest import quota for the US.
Relations between the US and the countries in the Asia Pacific region has existed since the end
of the Second World War. The military bases that stood in the Asia Pacific during the cold war
reflect US role as provider of security umbrella for Asia Pacific. Therefore, US economic and
trade stability is very influential on Asian powers Pacific. But the dominance of the United States
in Asia Pacific began to be threatened when China emerged as a competitor country. The rise
China's strength is of course a threat and a US concern views China as having the potential to
challenge its position as a hegemon country. With the strengthening of China which has the
potential to dominate Asia Pacific region, the US feels threatened by its influence in Asia
Pacific. The threat is not only direct to the US, but also to its allied countries which is
geographically close to China, so it feels necessary re-strengthening with efforts to suppress
China's development.
The trade war that occurred between the two countries became an obstacle large enough for the
development of the Asia Pacific regional economy. America The United States is included in a
new economic bloc in the Asia Pacific region known as the Trans Pacific Partnership (TPP). TPP
is a partnership mega regional in terms of free market covering the Asia and Pacific region. The
US strategy in enhancing bilateral and multilateral cooperation is the desire to strengthen the
position and role of the US known as "Rebalancing" policy (MacDonald & Lemco in Shabrina,
2014). The aim is not only to strengthen the position and role of the US, but also to prevent the
strengthening of China's role and position in the region. War trade between China and the US
will greatly affect economic performance regionalism in Asia Pacific.

US entry into the TPP in 2008 invited many countries in the Asia Pacific region to enter into the
regional cooperation. Though The US claims the ultimate goal of the TPP is to develop a region
free trade within the APEC framework, but many APEC member countries were not involved in
the TPP negotiations because they had not yet reached the standard the height set by the US,
including China. The result APEC has“divided” into TPP and non-TPP groups. But behind that,
one motivation for submitting the TPP acceleration and expansion proposal submitted by The US
is also motivated by the strengthening of China's dominance in the region Asia Pacific. The trade
war between

China and the US is not the only one obstacles to the development of the Asia Pacific regional
economy. Chosen Donald Trump as US president brings his own challenges to Asia Pacific.
After being elected president of the US, Trump immediately announced his exit US from TPP.
Asia Pacific which has already been divided due to the existence of groups TPP and non-TPP as
well as pro-America and pro-China must accept the fact that the TPP will not continue in the
absence of the United States in the deal. Countries that have already ratified TPP one by one
began to move into other regional cooperation. A total of 10 ASEAN countries have started
planning for the formation of the Regional Comprehensive Economic Partnership (RCEP)
initiated by the government China. ASEAN countries have no other choice apart from switching
from TPP to RCEP due to unclear cooperation and existence the opportunity to form other
partnerships with countries that have almost the same strength. This can lead to the emergence of
war new trade, namely the United States with Asia Pacific. For areas that being The New
Emerging Power, economic conflict is not a way to go easy. According to Baldwin (1993), the
state will receive much more advantage through cooperation than not cooperation. Institutions
and regimes international law is very important, because it is through institutions that the
principles, norms, rules, as well as decision-making procedures can facilitate interstate
cooperation. Institutions and regimes open opportunities for transparency for each of its member
countries, thereby reducing transaction costs as well can avoid the possibility of fraud committed
byother countries. Experience working through institutions, generally produce to be source of
strength
maintain cooperation.

The existence of these possibilities can be obstacles and challenges for Asia Pacific considering
how important cooperation with developed countries for countries in Asia Pacific which are
mostly inhabited by countries-developing country. Collaboration carried out within this scope
can creating interdependence for both actors and greatly benefiting Asia
Pacific which requires developed countries to improve their economy. Asia Pacific as The New
Emerging Power can become a region that solid if the developments they have experienced over
the past 2 decades have not hindered by United States interests in maintaining the situation
Its hegemon and chose to eliminate the influence of other powers in Asia Pacific.

CONCLUSIONS AND SUGGESTIONS

The condition of the capital market in a country cannot be separated from economic and non-
economic events that are taking place both at the domestic and global levels. As happened in
early 2017 when there were rumors of a trade war between the two superpowers, the United
States and China. This is inseparable from the election of the new US president, Donald Trump.
Before Donald Trump was elected as the new US President, he had campaigned for protectionist
policies towards the US economy. This resulted in increasingly tense US-China relations. One of
the US economic policies towards China is the imposition of import tariffs on a number of
Chinese products with a fairly large nominal value, namely US $ 50 to US $ 60 billion. The
United States also considers that China has been cheating in every bilateral cooperation and will
take this case to the Trade Organization
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