US-China trade war

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Effect of the US-CHINA Trade War
Trade is one of the most significant indicators of peaceful relationship between the trading sides. When countries co-exist peacefully, bilateral and multilateral ties are established. Economic growth and development of the United States of America and China for the last decades can be attributed to strong treaties that were agreed by their heads. The USA blames China for losing its manufacturing capacity to it and having many people jobless due to the closed industries (Copeland and Dale, 9).
Nevertheless, due to the disputes and disagreements between the two dominant business states, their expectations economically are likely dim down. The punitive tariffs imposed by the USA president Donald Trump are likely to reduce the economic growth of the Asian country. According to the Goldman Sachs Group analysis, China export is expected to fall by 25%, and consequently, the annual economic growth of China will fall 1% (Hughes, Neil, 100). Every fall of economic development by China will result in quarter fall in the USA.
Increasing the tariff charged on China’s export will cause it to cut its production something that will adversely affect China labor force (O'neill and Jim, 43). On the same note, if the United States manages to succeed in its production of large appliances, machinery, steel, auto parts, and other items previously imported, it will increase employment levels. Therefore, high employment in the USA will lead to the high inflation rate.

This is according to Philip’s curve that indicates decreasing trend of unemployment due to the high inflation rate. For the United States to get to a level where it will be able to produce cheaply or at the rate of China, it will take long because it requires capital intensiveness, an aspect that lacks in a country that imports on a large scale. Thus, a trade war is a negative externality for the involved nations.
Work Cited
Copeland, Dale C. "Economic interdependence and war: A theory of trade expectations." International Security 20.4 (2006): 5-41.
Hughes, Neil C. "A trade war with China?." Foreign Affairs (2005): 94-106.
O'neill, Jim. "Building better global economic BRICs." (2001): 31-67.