Will Trade Between China And The Us Be Defeated?

In recent years, the United States has been clamoring to identify China as a currency manipulator, but it has always been difficult to implement. The fundamental reason is that the evidence is seriously insufficient.

But let's make a hypothesis here. If the United States regards China as a currency manipulator and adopts a series of measures to impose sanctions on China, China will reverse the US in turn, so that a comprehensive trade war or a trade war with a certain intensity will be possible.

How much will this impact on Sino US economic relations?

First of all, China is the largest export market in China. In 2016, it accounted for 18% of the total export volume in China.

China's trade surplus with us goods amounted to US $about 250000000000, which is the largest source of surplus.

If the United States carries out extensive sanctions against China, it will obviously have a greater impact on China's export trade.

From the perspective of China's export industry, the main industry is manufacturing. The main products include mechanical and electrical products, audio-visual products, miscellaneous products, chemical industry and its products, textiles, metal products and so on.

According to the intensity of US trade protectionism measures, the impact of trade war will be quite different.

It is estimated that if the US tariffs on China increase by 10%-45%, then it may reduce China's exports to the United States 5.7%-34.3%, and China's total exports may thus reduce 1.1%-6.4%.

Tariff increases will also have a negative impact on China's GDP, which may drag GDP growth by 0.2-1.1 percentage points.

In recent years, China's GDP growth rate has been slowing down. The start of the trade war will obviously have a negative impact on China's economic growth, and employment will be under great pressure.

Looking at the United States, China is also a very important trading partner of the United States.

The Chinese market is the third largest export market for the United States, accounting for 7.8% of US exports in 2016.

The two largest export markets in the US are its neighbors, Canada and Mexico.

China's exports to the United States are relatively large. It is the largest source country of imports in the United States, accounting for 21% of the total imports of the United States.

The US trade deficit with China accounts for nearly 50% of the total trade deficit in goods.

It is evident that the United States is right.

The dependence on it is not low.

If the US side takes measures to impose sanctions on China, then China will certainly not be allowed to be slaughtered, it will also be in color, and China will adopt a series of counter measures.

The related industries of American exports to Chinese products are mainly high-end manufacturing and agricultural products.

The high-end manufacturing industry includes aircraft, machine tools, medical appliances, medicine, jewelry, automobile parts and so on, all of which belong to the manufacturing industry with high technology level and high added value.

The United States is a big producer and exporter of agricultural products. There are many agricultural products exported to China, including corn, wheat, beans and oilseeds.

Agricultural products exported to China occupy a pivotal position in the export of US agricultural products.

In the past five years, the proportion of agricultural products exported to China accounts for about 17-20% of the total exports of agricultural products in the United States.

If China takes the initiative to counter the export of US agricultural products, it will surely hurt the latter.

If China strikes back on protectionist measures in the US, Boeing's products must be the first to bear the brunt.

The company has sold a large number of aircraft in China for a long time, and of course China has imported many airplanes from European Airbus.

Boeing has a plan to export more than 6000 aircraft to China in the next 20 years.

If Sino US trade war starts, Boeing's export business in China will be greatly affected, and Boeing will be miserable.

But the problem is far from being confined to this.

Boeing, as an airline, produces mainly large airliners.

There are quite a lot of spare parts for large aircraft.

For example, a Boeing 747 aircraft has 6 million components.

Therefore, there must be a large number of enterprises around the aircraft manufacturing company to carry out its production activities, to provide parts for aircraft manufacturing companies.

Behind Boeing, there is actually a huge manufacturing sector supporting it.

As a result, Boeing's massive reduction in China's exports after sanctions has undoubtedly caused a heavy blow to a large number of enterprises, especially small and medium-sized enterprises, which rely on their production and operation activities.

Therefore, if China strikes back, it will be a Boeing company that will affect more than half of the manufacturing industry in the United States.

Another angle is also very important.

For a long time, most of China's exports to the United States belong to general technology intensive and labor-intensive products. These cheap and good products actually get a lot of benefits for American consumers.

At present, compared with the developed countries such as the United States, China's labor cost is still relatively low.

According to the data in 2015, the average wage of Chinese manufacturing workers is about 3.66 dollars per hour.

The average wage for manufacturing workers in the United States is 25 dollars.

There is no doubt that the same manufacturing industry, China's price is certainly relatively low.

Once the bilateral trade war is fought, the number of Chinese exports to the United States will obviously decrease, and a large number of products will be blocked outside the US.

Of course, Chinese enterprises will suffer a lot of losses, but at the same time, the United States will suffer a lot of losses.

It will also be adversely affected.

Its welfare losses include forced consumption reduction at high prices resulting from high tariffs and forced pfer of demand to more expensive local products and other imported products.

Some people think that the benefits of China's export of cheap and good products to the US consumers are negligible, but I do not think so.

Imagine that the American people are eagerly looking forward to Trump's new deal to improve their situation. The Sino US trade war has brought losses to their welfare. Even under the condition that the welfare expectation is relatively rigid, even a little loss is unacceptable.

Let me give you an interesting example.

A few years ago, the United States adopted a series of non-tariff measures against China's toy products, which obviously blocked China's export of toys to the United States.

Before Christmas, along with the rapid reduction of Chinese products, other countries' products, including local products in the United States, were full of store shelves, but prices rose sharply.

American children used to buy 3 or 4 toys with the same pocket money, but now they can only buy one or two pieces of toys.

So many American children are crying in the toy shop, returning home to continue crying so much that many parents are affected by their work.

In some parts of the United States, public opinion is in an uproar.

Many newspapers, television and other media commented that they should not take sanctions against toys sold in China.

This also seems to illustrate a problem, once the Sino US trade war starts, it must be a two losers.

Of course, considering that China's exports to the United States are large and there are still large surpluses, the actual damage of trade war to China will be relatively large, including greater pressure on China's employment.

If the US's sharp decline in exports to China is bound to cause.

There is a big fluctuation in employment, and manufacturing is the key part of the new US government's desire to improve.

If the United States imposed punitive tariffs on China, it would increase its import duties to China by 40 percentage points, and vice versa in China. It is estimated that in the next five years, the US GDP may decrease by 0.2% on average, while China will probably reduce 1.1% annually on average.

Although China will suffer a lot of losses, considering that the US economic growth rate is significantly lower than that of China, the reduction of 0.2% is not a negligible figure.

Moreover, the impact of trade war assessment is not to do mathematical problems. The endurance of the economy and the nation is also an important factor to consider.

If bilateral trade wars start, China can effectively pull demand through fiscal and monetary policies, which will offset the negative effects of trade war to a greater extent, while the relative policy space of the United States is relatively narrow. Under the condition of worsening economic conditions, there is bound to be a big rebound for the people.

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