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Is the current tariff war between the US and China creating winners and losers in International Trade?

Marylyn Saul

The current tariff war between the US and China is undeniably affecting international trade, and there are definitely winners and losers in this conflict.

The main purpose of tariff wars is to protect domestic industries and promote local consumption. However, it also creates opportunities for other countries to step in and fulfill the demand. Countries such as Japan and South Korea have already started filling the void and are benefitting from the current scenario.

On the other hand, the Chinese economy, which is known for its production and export capabilities, is losing out on trade benefits. The large export market to the US is being hindered due to the tariffs. In response, the Chinese government has increased exports to Europe, India, and other Asian countries, which makes them winners in this battle for trade dominance.

The US, on the other hand, is hoping to create a better trade balance with China and improve domestic production by forcing tariff barriers. This is expected to promote local manufacturing and employment. Although these policies may promote short-term improvements, they are damaging in the long-term. Based on the history of past tariff wars, they often lead to retaliation from other countries, worsening trade relationships and dragging the economies further down.

The agricultural industry is one of the main areas hit by this tariff war. The United States is one of the leading producers of soybean, and China is one of the leading consumers and importers. The tariffs have reduced exports of soybeans from the US to China drastically, which has caused financial losses for American farmers. China, in turn, has increased its imports from other countries. This shift in the supply chain has created benefits for Brazil, which is one of the largest exporters of soybean to China.

In conclusion, the current tariff war between the US and China is creating winners and losers in the global economy. Countries such as South Korea and Japan are benefitting from the reduced exports from China to the US, while China is losing out on trade benefits due to decreased exports of their products to the US. On the other hand, the US's policies to increase local production may promote short-term improvements, but it runs the risk of long-term damages to the economy. Based on history, trade wars rarely produce positive outcomes, and we can only hope that the conflicts will be resolved soon and a more sustainable trade relationship between the two countries can be established.