USA-CHINA TRADE WAR

Reduce the deficit of bilateral trade and bring American

01 jobs back home

• Out of the $796 billion worth US trade deficit in 2017,

CAUSES China accounted for $376 billion, or 47%, almost a half.
• Out of the total Chinese exports, 19% goes to the US. But
only 8.3% of the US exports go to China.

The US does not consider trading with China "fair"

 Prevent the growth of China’s military strength
02

• Even in the long run, it is completely untenable for the US

CAUSES to allow China to gain military superiority.

The US is taking measures to ensure its competitive advantage in the

national security sector and to prevent China from using American
dual-use technologies.
 The trade war is supposed to cut the federal budget
03 deficit

“the US will need additional sources of income like tariffs in

CAUSES order to balance its budget, and tariffs on Chinese products are
viewed as a main source of such income” (Dongsheng Di, Gal
Luft, & Dian Zhong, 2019)
How did Beijing’s government respond to
Trump’s trade policy?
 April – May 2017

US companies get greater

access to China’s
agriculture, energy, and
financial markets

Investigation on steel and

aluminium imports is initiated.
The US allows China to sell
cooked poultry to the US
 February – April 2018

• Trump announces plans to impose 25% • Tariffs on 128 product categories

tariffs on $50 billion worth of Chinese including fruit, wine, seamless steel
goods pipes, pork and recycled aluminium
• 178,6% antidumping duties on sorghum
imports
 July 2018

25% tariff on 545 products

25% tariff on 818
(imports worth $34 billion),
products (imports worth
including agricultural
$34 billion)
products, autos and aquatic
products
 August 2018

CHIN
25% tariff on 279 goods (imports worth
$16 billion) including: semiconductors,
chemicals, plastics, motorbikes and
electric scooters

A
25% tariffs on 333 goods (imports
worth $16 billion) including: coal,

US copper scrap, fuel, buses and medical

equipment
 September 2018
10% tariff (announced subject to 5% and 10% tariffs on $60 billion
further increase up to 25% in 2019) worth imports
on $200 billion worth imports from
China

US CHIN
 December 2018

The US announces that the new

list of tariffs will be delayed

China increases import of agricultural

and energy products, and lowers tariffs
on cars and auto products from 25% to
standard 15%
 May - June 2019

25% tariff (increase from 10%) on $200

25%-20%-10% tariffs introduced for $60
billion worth imports. Huawei and five
billion worth of imports (increased from
other companies of China are added to
10%-10%-5% correspondingly)
the Entity List
 June 2019

U CHIN
The ban on deals with Huawei is
S
reconsidered. 110 products are A
excluded from the 25%-tariffs

China announces its plans to

increase import of agricultural
products
China’s reaction influence the nation’s exports
and imports to the USA
China’s exports to US fell sharply
• China is one of the United States' largest
during trade war trading partners, and any changes in their
trade relationship can have far-reaching
economic implications.

• China's responses exacerbated the trade war

between the two countries, a war that can
only be resolved through negotiations.

=> INDIRECTLY, it has had a significant

influence on the nation's exports to US
(Source: ITC Trade Map)
 Export Declines

• Chinese exports to the USA were

negatively affected by the tariffs imposed
by the United States.

• Many Chinese products faced higher

tariffs when entering the U.S. market,
making them more expensive for
American consumers.
(Source: US International Trade Commission)
 Export Declines

=> This reduces the competitiveness of

Chinese goods and affects their consumption
in the U.S. market , particularly in industries
like electronics, machinery, and textiles.

(Source: US International Trade Commission)

 INFLUENCE EXAMPLE

(Source: CP Bown - Journal of Policy Modeling, 2021)

US imports from China of these products are down 62% since the 25% tariffs were imposed,
whereas imports from the rest of the world are now 60% higher. China’s share of US imports of IT
hardware and consumer electronics has been cut by nearly two-thirds, from 38% to 13%
 Shift in Export Focus
• In response to U.S. trade policies, China
sought to diversify its export markets.

• It focused on selling its products to other

countries or regions to mitigate the
impact of reduced exports to the USA.

=> While this didn't necessarily increase its

exports to the USA, it helped China maintain
its overall export levels.

(Source: World Trade Organization and Customs of

China)
Chinese International Trade with Asia in amount and percent
(in US $million)

• The left axis shows the total imports

and exports with Asia

• The right axis shows the proportion

of China’s total imports and exports.

(Source: F Huo - Finance & Economics, 2023 )

• The total volume of imports and exports between China and Asia shows a slowly
rising trend, but the proportion continues to decline.
Chinese International Trade with Asia in amount and percent
(in US $million)

• 2018 - 2019, in the case of an

overall slow decline, the proportion
of China’s total imports and exports
to Asia in 2019 has increased
significantly.

(Source: F Huo - Finance & Economics, 2023 )

After receiving a series of sanctions, China may transfer part of its foreign trade to
Asia, especially Southeast Asia, to seek alternatives.
 Chinese International Trade with Other Continents

• The change in the proportion of

China’s trade with other continents
in China’s total imports and exports.

• the proportion of China’s trade with

North America began to decline
significantly in 2018
(Source: F Huo - Finance & Economics, 2023 )

• In all other continents, the proportion increased after 2018.

Chinese International Trade with Other Continents

• The only major countries in North

America: Canada; the United States

• Canada’s trade with China only

accounts for 9% of China’s trade
with North America, accounting for
about 1.9% of China’s total trade.

(Source: F Huo - Finance & Economics, 2023 )

=> Indicating that this decline is related to the United States.

=> Trade between China and the United States has decreased significantly after the
China-US trade war. However, China is actively looking for alternatives in the
international market, and the total volume of imports and exports to other continents
has increased.
Who won the US - China trade war?
 (Source: Standard & Poor’s )

• The early impact of China’s tariffs on US exports was likely to prove greater than
that of US tariffs on China’s exports: $50 billion represents 38% off US exports
to China, but only 10% of China exports to the USA. However, there are no
winners in a trade war.
CONCLUSIO If we compare both economies, the losses would be

N 01 considerably higher for the US than China.

However, trade liberalization is clearly associated with

02 improved trade flows in the US and traditional welfare
gains in China.

China would gain particularly in consumer goods,

03 industrial goods and agricultural goods whereas the US
would be better off opening its consumer goods and
industrial goods.
How does the US - China trade war affect Vietnam’s and
global economy?
 01 02 03 04
VIETNA
M
 VIETNA
01
M

Although the US-China trade war has had

many negative effects on the Vietnamese 02 03 04
economy, it still provides ‘golden
opportunities’
 VIETNA
M
02

When the trade war begins to reach climax

point, most US businesses will leave the
Chinese market
01 03 04
 VIETNA
03
M

The production chain and value chain of

American companies as well as multinational
companies will be broken

01 02 04
 VIETNA
M
04

This will be the best time for

multinational corporations to
restructure their production line and
supply chain

01 02 03
 VIETNA
M
For Vietnamese enterprises, this is a ‘golden opportunity’
to change and evolve its present production and business
structure to become a significant part of the global supply
chain
 OTHER
COUNTRIES
Neighbouring countries, like South
Korea, Taiwan, Malaysia and
Singapore, have close economic links
with China which leaves them
particularly vulnerable to the trade war
 OTHER
COUNTRIES

Countries most dependent on US also

facing similar situations. However, these
countries are not as exposed to the trade
war as China’s Asian neighbours
As a net exporter, the EU will be
more affected by a slowdown in
global trade

The German economy is reliant on

exports and would be badly affected
by a global slowdown
References
1. Archana, V. (2020). Who will win from the trade war? Analysis of the US-China trade war
from a micro perspective. China Economic Journal, 13(3), 376-393. doi:
10.1080/17538963.2020.1785073
2. Bown, C. (2022). Four years into the trade war, are the US and China decoupling. The
Peterson Institute for International Economics. Retrieved October 26, 2023 from:
https://www.piie.com/blogs/realtime-economics/four-years-trade-war-are-us-and-china-decoup
ling
3. Dhar, B. K., Tiep Le, T., Coffelt, T. A., & Shaturaev, J. (2022). U.S.-China trade war and
competitive advantage of Vietnam. Thunderbird International Business Review, 1–9. doi:
10.1002/tie.22325
4. Gorman, L. (2022). How the US-China Trade War Affected the Rest of the World. National
Bureau of Economic Research. Retrieved October 25, 2023 from:
https://www.nber.org/digest/202204/how-us-china-trade-war-affected-rest-world
References
5. Huo, F. (2023). Impact of China-US trade war on China’s import and export structure.
Finance & Economics, 1(3).

6. INAA. (2019). US-China Trade War Impact on Global Economy. Retrieved October 27,
2023 from: https://www.inaa.org/us-china-trade-war-impact-on-global-economy/

7. Kapustina, L., Lipková, L., Silin, Y., & Drevalev, A. (2020). US-China Trade War: Causes
and Outcomes. SHS Web of Conferences, 73, 1-13. doi: 10.1051/shsconf/20207301012

8. Steinbock, D. (2018). U.S.-China Trade War and Its Global Impacts. China Quarterly of
International Strategic Studies, 4(4), 515-542. doi: 10.1142/S2377740018500318
THANK
YOU!