TRADE WAR?

So the most talked about topic in the recent past and that is the US China Trade War. What is Exactly a  Trade War???. Trade war is nothing but two or more countries trying to stop the free movement of goods and services from one country to the other. Over the past year, the world's two largest economies have imposed tariffs on billions of dollars worth of one another's goods. US President Donald Trump has long accused China of unfair trading practices and intellectual property theft. In China, there is a perception that the US is trying to curb its rise.                                

Trump's tariffs policy aims to encourage consumers to buy American by making imported goods more expensive.So far, the US has imposed tariffs on some $250bn (£204.5bn) of Chinese goods, and China has retaliated with tariffs on $110bn of US products.  

The point is to punish China by making Chinese products more expensive for American consumers and businesses to buy. If Chinese products suddenly become more expensive, they’ll buy those same products from somewhere else, and Chinese businesses will lose money.China immediately accused the US of starting “the largest trade war in economic history to date” and responded by Imposing 25 percent tariff on $34 billion worth of US goods, including soybeans, automobiles, and lobsters.And China has deliberately targeted big US agricultural exports like soybeans that come from states in the heart of Trump country, where neither the president nor his party want to see economic instability or job losses.

First and foremost, it has become increasingly clear that the trade war is hurting the economies of both the countries. Neither will emerge from this conflict unscathed. Unfortunately, however, the last 18 months have done little to clarify who is winning — that is, who is hurting less and can credibly hold out for longer. Take China. Before the trade war, it was already facing a number of significant challenges, first among them how to effect a transition from its current reliance on cheap manufacturing to the production of higher value added goods.Moreover, China’s economic growth has slowed to a 3 decades low of 6.2%. And perhaps more ominously for the country, there are growing signs that foreign companies from America and elsewhere are looking outside china  as they expand their sourcing, production and distribution activities.

Perhaps most notably, farmers, many of whom continue to support donaldji, are beginning to tire of the sacrifices they are making for his uncompromising positions. With the Chinese government threatening to retaliate if Trump follows through on the new tariffs, their willingness to go along may be even more sorely tested.To keep agriculture on side, the Trump administration has channelise billions of dollar of subsidies to those hurt by his trade policy. But this approach also has its political costs, with more fiscally conservative supporters of the president unwilling at the price tag.

Since neither side is clearly winning or losing, we have probably not seen the end of this conflict.