The economic conflict between the
United States and
China has been simmering and has entered a new and dangerous phase. However, now the issue is that whether the two sides can step back from the brink or either of them will step back and when it will end and what damage it will leave in its wake. This
global trade war between USA and China is engulfing the world under its influence, and US
President Donald Trump intends to keep fighting.
With this attitude, the US President
Donald Trump believes that eventually, some of the United States trading partner countries will understand that they also need to slash down their barriers over imports and also make doing business easy for American companies on their soil. In contrast to this, Trump has been blamed by many for upsetting the pattern of global
trading and narrating on what could be a new era of restrictions and restraints over free trade with countries. In this great struggle of powers, it is very difficult to sort out and differentiate between the right and the wrong.
In all these tussles between USA and China trade, China’s Central Bank is having a large amount of U.S. dollar reserves, and this reserve could be of
about $2 Trillion out of a total of $3 Trillion of foreign exchange reserves in China’s Bank. Therefore, it won’t be wrong if we believe that China could dump these US bonds and make U.S. borrowing cost rise sharply and putting the U.S.
economy into the phase of recession.
However, in this threat of
trade war, as well as the increasing tariffs of Chinese, U.S. companies are looking for other options to fulfill their supply chains from Vietnam or from other low-wage countries. But before that US companies could settle properly Trump ignited the trade war, along with this China has also opted for its own quieter version. This step from both countries has started gradually excluding American companies from the Chinese market. Apart from that, the US even targeted Huawei and other
Technology companies of China with export restrictions and threatening their viability.
The comforting shield of economic ties between the U.S. and China is diminishing at an accelerating pace. And it seems clear that they will become less and less dependable over each other as the trade war takes on its pace. This, in turn, raising the risk of increasing conflict between the world’s two most powerful economies.
If this resulted in World War III, then the consequences would be worse or I say, it would be unimaginable and nasty which could even involve armed conflicts as well. In addition to this,
the Policymakers and negotiators of both countries need to keep this risk at the top of their concerns as to when they used to confront one another in a global trade war. As this could someday erupt into the third world war if the tension remains to rise with this pace and intensity.
As well as, history is also a great proof for the whole world that the issues of Trade Wars between countries will eventually end up over wars or
World War. Therefore, it is very important for negotiators of the country to take each opportunity in pacifying the trade issue or end up the trade relations intelligently with mutual consents.