THE US-CHINA TRADE WAR: CAUSE-EFFECT ANALYSIS

Abstract

The US-China trade war has been considered one of the urgent issues in today’s international trade. In fact, this is a trade war where top two largest world economies participate.  In this paper, we have made an attempt to describe and explain the motives behind this trade war along with the potential threats, causes and effects for the world economy. Comparative macroeconomic analysis of the involved countries has been also conducted. Possible retaliation of China and other countries to the US’ increasing in tariffs on imported goods, protectionism and deficit issues in the US are discussed in the first part of the paper. The authors focus on the potential threats and effects that this trade war may have on the world economy from the political economy point of view. Authors’ vision on the future prospects of the current situation is also presented.