Perception vs. reality: understanding the US–China trade war

Abstract

Despite being an economic and military powerhouse, the United States (US) has started seeing itself as a victim of exploitation by other countries, particularly by China, due to its sheer size and the magnitude of its trade with the US. It was under the leadership of the US that the present international economic order was created. This article argues that this order has had pre-existing frictions, which have culminated in this trade war between the US and China. The U.S. arguments of being in a disadvantageous relationship with other countries come across as flawed and misguided when looked at in the light of current economic reality. The reasons behind the mutually harmful nature of this conflict are discussed and potential conciliatory solutions are provided.

Keywords:

• Trade disputes
• globalisation
• tariff barriers
• US–China trade
• services trade
• trade in goods

Note

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Rehabilitation programme sponsored by the U.S. for 17 war-ravaged countries of Europe. From 1945 through 1947, these nations received nearly $13 billion in aid from the US.

Additional information

Funding

This work was supported by the ‘University Grants Commission (3764/(NET-DEC.2015))’.

Notes on contributors

Ayesha Fatma

Ayesha Fatma is a doctoral candidate under the supervision of Dr. Nalin Bharti (Associate Professor) at Department of Humanities & Social Sciences, Indian Institute of Technology Patna, India. Her ongoing topic of PhD research is ‘Non- Tariff Barriers with special reference to TBT and SPS. Prior to joining IIT Patna, she has finished her Master in Economics in 2016 from Patna University, Patna India. She has also worked with Asian Development Research Institute at Patna. She has completed an online course offered by UNCTAD VI on Economic Analysis of NTMs.

Nalin Bharti

Dr. Nalin Bharti is trained in Economics and awarded doctorate from South Asian Division, JNU, New Delhi. His PhD is on Issues in Privatisation and Its Practice: Divestiture of State Owned Enterprises in Bangladesh and Lessons for India. His pre- and post-doctoral employment includes, visiting Lecturer in colleges at University of Delhi during 2000–2005, Research Associate in 12th Finance Commission, Government of India in 2004, Lecturer Law and Economics at Hidayatullah National Law University, Raipur. Lecturer Law and Economics at NALSAR University of Law Hyderabad. Currently, he is an Associate Professor of Economics in School of Humanities and Social Sciences, Indian Institute of Technology Patna. His publications include the area of India’s Economic Reforms, Intellectual Property, WTO and India and Labour Economics. He has successfully completed two sponsored research project by UNICEF office of Bihar. He has been awarded Diploma of Appreciationat University of Bialystok, Poland in October 2014. He has contributed around 12 research papers in International Journal, One Full reference book, Six book chapters edited by international authors and more than 50 conference papers in India and abroad. His online course on Infrastructure Economics offered on NPTEL got a wide range of acceptance among the students of India and abroad. He is currently involved in a research project on India–Japan Trade and Investment: What new after CEPA jointly with. Professor Takahiro Sato, Professor, Research Institute for Economics and Business Administration (RIEB) Kobe University, Japan.