The Looming USA-China Trade War and Its Consequences

- This paper looks at the evolution of the US-China economic relations from their complex, strong, multi-dimensional co-dependency, built up along many decades, to their growing disengagement and rivalry, following the lose-lose option for a trade war. The analysis places the trade tensions against the backdrop of the international production structured into global value chains and production networks, stressing upon the inadequacy of the policies adopted by the two actors, primarily by the US, and demonstrating why the consequences of the conflict are expected to be negative. The clash of the two world economic giants, which has unrolled since the begining of 2018, but has intensified especially in its second part, has disrupted not only the two rival economies, but also their other partner countries and the world economy as a whole. As such, in its final part, the paper focusses on the expected consequences of the trade war for the economies, companies and populations of the US, China, South-East Asia and the EU, concluding that the US-China trade war will have no winners and recognising its real rationale as the scramble for the economic and technological dominance of the world.