Question

detailed analysis of US-China trade impasse. The Trump administration accuses China with three (3) main issues. In brief, analyze those all those accusations against China. Using empirical research, you will be examining the nature of each issue. Areas you will consider include description and analysis of each issue, its effects on US economy and the appropriateness of US response.

-at least 7 pages, and make recommendations on how to assist President Trump in resolving US trade imbalances with China

Answer 1

The US & China trade relations have improved over past 30 years but the tensions between the two of worlds largest economies have increased over past few years .The maor key issues du eto which this tension has arised are

The trade defecit- Trump has shown his worry about trade defecit of china wit several nations including china . A few policybuilders view this trade defecit with china as the result of unfair policies which majorly favour china and due to which this trade defecit has increased.On the other hand a few scholars view it as misleading as it is due to growth of interior supply chains .

Industrial Policy- Most of the US china trade tensions arise from china due to incomplete exposure been provided to US investors also most of industrial policies are used to support the domestic companies in the china .China also provide subidies , tax relaxation and low cost loans to its domestic firm which is a great issue for china .Also policies like made in china 2025 economic plan is a concern to USA and its investors and it shows favortism of govt towards domestic firms.

Foreign direct investment- The US china FDI flows are relatively small as compared to their imports and exports trade .The decline of flow of FDI of china towards USA states the china's effort to irrational flow of funds but these facts may differ from one report to another so it must be taken into the account as the area of concern.

USA can improve the situation of trade with china with following measures

A close relationship - A close relationship with china would not only bring the economic upgradation in both the nations but would also help to eradicate the distrust between the nations also the history tells that countries with high degree of investment have a good relationship.

Investment - Both the nations should increase investing more and more in the other nations also the huge amount of FDI will increase the job oppurtuinities in both the nations

Techonological tariff - The discussion for the reduction of technological tariffs should be initiated and also this will increase the amount of semi skilled and skilled labours in both the nations.