US China trade war

姓名:吳家謙
系級:土木四甲
指導老師:林保宏教授
What is trade war?
• A trade war is an economic conflict resulting the extreme protectionism
• A trade war happen when one country retaliates against another by
raising the import tariff or placing other restriction on the opposing
country.
• When a country’s Import>Export, it will generate the “Trade deficit”.
Which means that you are buying things from others instead of selling
things.
Why US set up a trade war to China
 1.Trade balance/ Trade Deficit

As China developed, China become the “factory” of US, China manufactures more and more product to US, and
US didn’t import as much product as China does, So that the trade deficit getting more diverse.
2. Promoting domestic manufactory/ business
• Increasing the tariff of foreign product can lower the intention of
purchasing foreign product like China, Japan. As a result, US resident will
buy/support the local product
• As the demand of domestic market increase, the supply will also increase.
It will lead to a situation that more US resident have a job, the
unemployment rate decrease
3.China threated the US Intellectual property(IP)
• Foreign companies complain that China uses administrative tools such as
foreign ownership restrictions, business licensing
• Systemic IP theft in China costs US companies at least US$50 billion per
year
• Example: Massachusetts-based American Semiconductor
• In 2011 AMSC discovered that the Chinese manufacturer had stolen the
source codes of the control system by bribing an employee in AMSC’s
Austrian subsidiary.
What happen in the trade war?
 USA announce a set of tariff to China
• The US has imposed tariffs on more than $360bn (£296bn) of Chinese
goods, and China has retaliated with tariffs on more than $110bn of US
products
• On 1 October, the US plans to raise an existing 25% tariff on some
Chinese products to 30%.
• Washington then plans to deliver a wave of new tariffs on Chinese goods,
ranging from footwear to telephones, on 15 December.
• Trump escalates trade war with fresh tariff hikes
• US delays some tariffs on Chinese imports
Chinese product which affected by the USA’s tariff

USA targeted to Huawei, Xiaomi

Due to the 5G invention and application on USA

PCB (Printing Circuit board) will be affected significantly

Not only China has introduced the tariff by
USA, but the rest of the world

Due to the rising number of illegal immigrant from US-Mexico

Boarders Trump has introduced some tariff to Mexico until
they can fix that problem

The conflict dates back to 2004, when EU authorities said Boeing

received $19 billion in unfair subsidies from federal and state
governments between 1989 and 2006.
China’s respond to Trump tariff
• Applying “Tit and Tip” tariff back to USA, ranging from 10-15%
• Planning on export restriction to USA, like rare earth, metal……
• Negotiation with Trump
Influence on both side
Gambling chips for both side
USA China
• Food ingredient, like: meet, • Rare earth
soybeans, pop corns……
• Medicine/pills
• Semi-conductor/chips
• Cheap electronic manufactory,
• 5G communication technology PCB, mobile, PC
from China
• Metal
• Chinese’s electronic industory
General Influence
• Damage nearly all the customers and company within China and USA, as
the market prices has a significant increase
• Huge destruction on supply chain, like USA to find a place to assemble
the Iphone, metal for assemble a car , or China need to find new supply of
semi-conductor
• Affect on logistic worldwide, as there will be much less cargo that are
needed to ship
• Lost of interest for investment in USA and China, since It is hard to know
who will win the war
• As a result, the war will affect the global economy.
Influence to China
• China, the “hub” of manufacture to the world. Many foundries need to
move out from China in order to avoid the high tariff announced by
Trump.
• As many foundries move out from China, many labor lost his/her job. As a
result, the unemployment rate increase recently.
• Since USA no longer to supply the Semi-conductor to China, China has to
find it’s way to improve the function/technology of Semi-conducting
Influence to USA
• As the ingredient of the industries rely on China(iron, aluminum…….), the
production cost of the product made in USA will be significantly higher.
For some of the USA small company which cannot afford the expansive
tariff has no choice but to collapse
• Market price will much higher especially for Chinese product. Customers
have to pay more than it used to be.
So who will win? USA? China?
No one wins
• Actually, I am not optimistic for both side, since a trade war will cause
destruction on two sides economy.
• China and USA both have an enormous debit itself. As USA involve huge
amount of money upgrading the military power and war assistant to
Ukraine. On the other side, Chinese focus on “One belt one Road”
development, as Chinese needs to borrow money for investing the
infrastructure of the countries. Not to mention the serious corruption in
China.
• Trade war has a huge and long-term impact to China and USA, especially
for those investor who want to invest Chinese and USA market. Due to
the uncertainty situation.
Thank you for your attention