Implications Increase of Protectionism Between USA and China for International Business

Abstract

The main aim of this paper is presentation the implications increase of protectionism between the United States and China on international business. The main objective of the research task is to give a comprehensive analysis of current trends in foreign trade theory and policy and in particularly the models of foreign trade policy, trade interests indicated by export orientation and import sensitivity, protectionist pressures in different political system, the level of protectionist pressures, new tendencies in international business, reasons for the USA to implement tariff sanctions. China will be significantly hurt by tariff trade war in all indicators, including welfare, gross domestic product (GDP), manufacturing employment and trade. However, it is pointed out that although there will be definite impacts on China, the costs should be maintainable and will not severely damage the Chinese economy. In regard to the United States, the simulation produced results that described, the US will gain on welfare, GDP and non-manufacturing production, but hurt employment and trade.