Is there an Economic Power War Between China and the US?
The trade war between China and the United States is all about who should be the current superpower. These are economies that the whole world depends on. No nation wants to be seen as inferior in terms of national development or economic base.
It explains the reason why they ever produce innovative products and services just to outdo the other. It has reached a point where the origin of a commodity dictates its quality. China is known for substandard products, especially the ones that reach the African market (affordability).
As much as it has worked to its advantage- dictating the African economy- the developed nations have since rejected their goods.
According to BBC, the bitter trade war got to its worst state to a point. There were hefty tariffs on goods from either of the countries. As much as there was a trade deal between the two to bury their trade differences. It was all an exercise in futility.
What were the reasons for the tariffs?
- Americans did this to promote their good
- China did it to prevent goods from America from landing in their country
- It is an avenue to bring the two economies to a round table
- A show-off on how a country is self-sustainable
- To enrich the United States
It was evident that the war between these large economies was not going to end anytime soon. At the same time, the two suffered. The American multinationals could not access the Chinese market and vice versa. At the beginning of the year, they were no option but to sign a trade deal as a sign of ending the war.
What is the trade agreement meant to achieve?
- Open the markets for maximum savings
- Allow more revenue for both countries
- Opens more social and cultural ties between the two warring countries
- Share ideas on development agenda
What caused the enmity between China and America?
The current US president felt that China had unfair trade practices-like cheap goods; besides he looked at the country as a way of misusing intellectual property to misuse its trade ties. The only way was not to block them from any further business transactions through the tariffs which backfired.
Take note, Trump was a renowned businessman who controlled a high percentage of the market share in the US economy. He understands too well the impact it had on his business when he wanted to expand his market to the Asian continent.
His election as the president was a platform for a payback time not knowing that he holds the business progression of other business owners crucial to build his legacy in politics. There were mixed reactions among the legislative assembly of the United States. The Chinese government was also proud to beg for economic ties instead beat the United States economically? Have you been beaten in your own game?
Chinese trade plan against US business moves
The technology was one area the two economies were looking for dominance. The Chinese made sure they had all American products and made “replica” with no option for patent and copyrights protection- one of the conditions before the trade war was signed. It worked for the Chinese government, although with the emerging economies.
The US never realized that they also import energy products from the Asian continent? What did the Chinese do? They made a trade deal with the Arab countries- the main oil producers to the point that the Americans had no control of the oil reserves. Who lost in the long run- the US business community?
What prompted the signing of the trade agreement?
- The US economy suffered to an extent there was a drop in the GDP
- Emerging Economies preferred to work with the Chinese government making the US the losing partner
- Other mini superpowers also denied trade ties with the US – a trade protest
- The Chinese needed to work with the US to gain in the technology industry
- Most developing economies sought grants from China making the US the looser
- Simple- to humble the self-proclaimed superpowers
The current situation
We can say that the war brought a win-win situation between the two countries. If you are looking for benchmark opportunities in two countries, then China and the US top the list. Business critics feel that the relationship is neither good nor bad since each of them has something to gain from international ties.
This is common because they also have a conflict of interest in politics and security docket. Some countries like Beijing were to follow suit based on the agreement of the two economies.
Business experts feel that it was wise for the two to agree since there was going to be a serious economic gap between developing and developed countries- the main battleground was- the emerging economies.