Political Geography: North America / Topic: Trade Wars

Author:: Su Qingyi
Publication Date:: 03-2018
Content Type:: Policy Brief
Abstract:: China has urged World Trade Organization members to uphold the multilateral trading system, and oppose the use of Section 301 of the Trade Act of 1974 by the United States as it severely violates WTO rules. Three experts share their views with China Daily on the developments and consequences of the Donald Trump administration's protectionist moves. Generally speaking, how international trade would develop, now that China has been forced to take up the gauntlet thrown down by the Trump administration, mainly depends on the US. Once the US ceases fire and returns to the negotiating table, China would be more than happy to hold talks with it. With successful and fruitful negotiations, the ongoing trade conflict would be resolved. But if the US refuses to resolve the issue through dialogues, the trade conflict would most likely prolong to the agony of both sides.
Topic:: Trade Wars, Trade, and Donald Trump
Political Geography:: China, North America, and United States of America

Author:: Li Chunding
Publication Date:: 03-2018
Content Type:: Working Paper
Abstract:: This paper uses a multi-country global general equilibrium (GE) model to numerically simulate the effects of possible China-US trade wars. We introduce an endogenous trade imbalance structure with trade cost into the model which helps to explore both tariff and non-tariff trade war effects. Our simulation results show that China will be significantly hurt by the China-US trade war, but negative impacts are affordable. The US can gain under unilateral sanction measures to China, but will lose if China takes retaliation measures. Comparing the effects under mutual trade war, China will lose more than the US. Introducing non-tariff barrier trade wars will intensify the negative effects, and comparatively negative effects to China are larger than to the US. Mexico’s involvement in trade war with the US will strengthen the negative effects and comparatively hurt the US more. Under non-cooperative and cooperative Nash bargaining equilibrium, the US can gain more than China in trade war negotiation, which means the US has stronger bargaining power than China. Additionally, trade wars between China and the US will hurt most countries and the world especially in GDP and manufacturing employment, but benefit their welfare and trade.
Topic:: Bilateral Relations, Trade Wars, and Trade
Political Geography:: China, Asia, North America, and United States of America

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