Firstly, China is running ahead of the US in the trade war as the US can’t gather other countries to go along with Trump’s administration against China, as most countries from the developing to the most developed countries have great trade ties with China with products from cars to groceries and the market is expected to be greater in the future as China increases its production and opens its market (Oktay, 2018).
Secondly, even if some of countries agree to stay on Trump’ side and go against China with the US; it doesn’t guarantee any economic success to countries involved much less a win over this battle. It might be a risk to have the world economy run by China but run by the US with the “America first” principle might not be a great solution to this war either (Oktay, 2018).
And lastly, the US does not have all the resources to survive without China neither to fight against it, China has its own savings to keep investing domestically if external factors collapse and tend to affect China, but the US doesn’t have an economic strategy like China that can keep the country on its feet if any external matter changes and affects the USA. China has a far greater chance of winning this trade war, it doesn’t mean the trade war is already won but China is prepared for it.
As result of good restructuring strategy that China has to run the country’s economy with the US by migrating its labour force to neighbouring countries, with its trade surplus over the US, even if other nations join the US in this battle with the “America first” principle will voluntarily give up on its own national economic interest in order to save the US, neither is the US prepared to survive economically without China, America is too dependent on China more than they think, therefore this trade war belongs to China.
2.3 Both will hurt, but who hurts more
However, there is a third debate that says the ongoing trade war won’t have either the US or China as the winner, as the indicators one uses to define the winner of this war will change the perspective of winner in it, and there are a few reasons.
First of all, as this trade war is rather recent there isn’ta enough economic data neither there has been a great impact on both nations or spill over effect on other nations, for a solid decision on who wins it, there must be more time and economic impact on one of them at least.
China did have a decline on the market in 2018, which was a result of strict regulations and weak economy but it picked up towards the end of the year despite the trade war and the $200 billion tariff China was submitted to (Chen, 2018).
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Secondly, both economies will suffer economically or even politically if this trade war continues and spreads, nor China neither the US is willing to give in and negotiate as both want to have the advantage, this can’t be a win-win scenario, but if not carefully managed, this trade war will take the whole world into it and cause a greater harm than it is expected so far, and the fact that the US isn’t winning the trade war right now doesn’t necessarily mean China is winning it (Chen, 2018).
Also, this trade war will severely hit both countries but for China, the pain will be much greater if it continues as China’s dependence on US’ trade and technology, but the main consequence China might face is the billions of dollar it will lose if the US stop importing Chinese good, which according to Huang is totalled US$500 Billion, also China will have to restructure its manufacturing hub which might increase its products cost, China is one of the largest nation in the world and the US its largest trade partner in products and commodities, even if some other nations try to fill in the trade gap left by the US, yet there will be a time China will have to return to the US trade partnership and probably the other way around too (Huang, 2018).
It has been a delicate task to take side of who will win this war as Trump’s objectives look confusing with all this taxation, it looks more a personal goal to reduce trade deficit but also stop the “Made in China 2025” project, force China to open its market, stop China from stealing intellectual property, change the capitalism system but most importantly, stop China’s rise. With some many goals in mind, the US cannot tackle every single objective and win the trade war altogether; this is far too great for a single nation to tackle and wins it, despite its economic power as the US has (Chen, 2018).
As a third point, Trump’s administration should be reminded of its high dependence on China which is higher than the other way around, The US is very confident over the tariffs imposed on China will be effective, therefore resulting in China bowing down to the US. In Professor Winter Nie’s perspective, Trump needs to understand the current China is already well developed, with access to Western technology and the manufacturing techniques it looked for in the 1980’s, thus China is an economy that the US cannot ignore its economic and political power, if Chinese consumers stop buying the American products such as Iphones or the government stop buying airplanes for the next 20 years, the US market will lose about US$1 trillion (Nie, 2018).
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consequences of its own sanction (Mullen, 2018).Both economy powers are pushing each other to see which can endure the trade tariff for the longest; Nevertheless, they are aware this trade war can affect other economies as well through businesses and investment. Scott Kennedy, the director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies affirmed that Trump’s administration believes the trade war will also strengthen his political credibility domestically, therefore weaken China but he also thinks this enthusiasm will cool off soon and both nations will come to negotiation soon (Mullen, 2018)
The two main nations involved in this trade war might not realise the effect of their conflict over their population, current American companies in China are rather concerned about the impact their companies might suffer with the trade war goes on.
The chairman of the American Chamber of Commerce in China stated that the
"Increased tensions in the US-China economic relationship will negatively impact ... operations in China," William Zarit (Mullen, 2018). "We urge the two governments to come back to the negotiation table with the aim of having productive discussions based on achieving results -- focused on fairness and reciprocal treatment -- instead of escalating the current situation.” said Zarit.
China has imported US$1.841 trillion of good in 2017, which is a 5.6% decrease if compared to 2013, however only in the first three months of 2018, China has already imported
$497.3 billion in goods and it is estimated to reach $1.989 trillion by the end of the year (Workman, 2018).
China’s importation is mainly from Asian countries 55.9%, leaving only 44.1% for the rest of the world to export to China which only 6.2% includes Latin America (Excluding Mexico). Soy beans is the 6th most imported products by China, totalling $39.6 billion with an increase of 16.6% (Workman., 2018).
There are two points of view to predict who will hurt more, if from a infrastructure perspective China is highly vulnerable and likely to suffer the most consequences if the trade war goes on, as its hub will have to be restructured and find a new market to export its products once the US closes its market to Chinese good, nevertheless the conflict is not fully won for
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the US. China doesn’t depend on the US importation as much as it is thought, 55% of China’s importation comes from Asia nations with the other 45% from all over the world, undoubtedly the US plays a great role in the Chinese trade but China won’t collapse with it(Workman, 2018).
2.4 No winners
This Sino-US trade will affect not only these countries trade, but also companies and the final consumers. Companies will be forced to buy local goods which are more expensive than the Chinese, therefore the final consumers will have to pay extra for the extra expenses companies will have, and this is something that Trump might not realise that there might be a negative effect when he tries to fight China trade wise. However, this Sino-US trade war might not necessarily affect other great economies such as Brazil and US trade relation directly, so far there are no signs of any effect as Brazil and the US as Brazil and China have different products being traded, what is likely to happen and according to the data from MDIC, the USA will have to export its products somewhere else, and Brazil seems to be the chosen one as US importation increased in Brazil in the last 11 months (MDIC, 2019).
A quick analyse regarding Brazil and China in the trade war is that the Brazilian farmers will have a great benefit, specially the soybeans farmers as China places high tariffs on soybeans from the US, Brazil has the opportunity to step up and fill the gap that will be left by the US of soybeans importation in China. The trade war might not last a long term, but for the time being if the trade war continues, Brazil will be the only soybeans supplier to China (Elmer, 2008).
However, Gustavo Oliveira, an assistant professor of global studies at the University of California, suggested that even though Brazilian farmers have already invested in producing more soybeans due to China’s demand, China will have to buy from the US sometime soon.
Oliveira believes the trade war will cause a great pain to farmers worldwide, using Brazil as an example that farmers are used to deal with weather and market unpredictability but 25% of unpredictability of the two biggest economies will be very frustrating to everyone (Elmer, 2008).
Considering the effect of the trade war might be not bilateral but multilateral, as the Foreign Minister Joseph Wu (吳釗燮) stated Taiwan’s strong will to strengthen trade relation with the US and urged the US to consider Free Trade Agreement, the
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Brazil-Taiwan is that Brazil will lose even more market, that is Brazil will export even less to Taiwan, as the US products prevails in the Taiwanese market and Brazil main relation to Taiwan is commercial, therefore trade, more than political ( Teng, 2018).The trade war created by the US and China will get other countries down with them. It is not a dispute between two nations where only them suffer the consequences but as international trade creates an interdependence of nations, if the two largest economies fight and one collapses, others will collapse too as she suggested that Beijing, South Korean, Taiwan and even Singapore may be affected. As a family company of speakers in Singapore run by Joyce Seow has its factory in China which supplies most of its goods to the US as their products will also be taxed with the 25% tariff, Singapore is a rich nation with the busiest port in the world, some other countries in south East Asian as Malaysia and Indonesia will also be affected because although some of its products are produced in their countries, they are usually finalised in China, therefore considered a Chinese product and submitted to the tariffs imposed by the US (Vaswani, 2018).
Keyu Jin believes it is hard to tell who might have its economy and trade threatened the most so far, there is not enough data to draw a solid conclusion, however since the trade war was initiated, China had a great reduction of soy beans and agricultural products importation as well as aircraft related material (Parker, 2019). As globalised as the world is today, there cannot be a loser or winner in this war, both nations get hurt as well as other nations trading with China and the USA and it can cause a significant change to the dynamic of the international market. Nevertheless, China is not intimidated by US’ demand and longs to solve the conflict the soonest so the country can proceed its independent economic development despite the long-term tension that might prevail between the two super powers (Parker, 2019).
The probability of no winner in this conflict is rather high as there might be other trade partner to both China and the US which will benefit as well as have some unfavourable outcome in their trading market, for instance there is Brazil benefiting from exporting more soy beans to Chinas but also Singapore which might have a decrease of their exportation as some products go through China and is sold the in the international market as a Chinese good rather than Singaporean, but there will be a little of loss and win for each nation involved in this battle.