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What’s the Worst Case Scenario in the US–China Trade War?
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What’s the Worst Case Scenario in the US–China Trade War?

Ning Nanshan
ZH Island WeChat Wemedia Account , 2018
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In July 2018, US president Donald Trump announced new tariffs on China-made products entering the United States, slapping taxes on another $200 billion worth of goods. While China has also imposed tariffs on imports from the United States, Chinese citizens have become visibly concerned over the effects of the trade war on China’s economy and their livelihoods. In this article from the influential business and economic WeChat wemedia account Zheng He Island, analyst Ning Nanshan offers some reassurance. He looks at possible effects of the trade war on China’s GDP and explains why both nations will likely exercise restraint. He also explores ways in which China may retaliate. getAbstract recommends this insightful article to anyone interested in global trade and the global economy.

Take-Aways

  • Different institutions estimate that, in the worst-case scenario, China’s GDP may fall by 0.64% and US GDP may fall by 0.6% due to the US–China trade war.
  • However, it probably won’t come to that because current tariffs are lower than the ones these institutions used in their calculations. The United States allows Chinese companies to apply for tariff exemptions on some products; and both countries are wary of the effect of the trade war on domestic businesses. 
  • The US–China trade war is likely to affect especially those American enterprises that have their manufacturing plants or supply chains in China.

About the Author

Ning Nanshan is a writer for the Zheng He Island WeChat Wemedia Account and covers news on economics and business.

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