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The origin of the US-China trade war

Author

Listed:
  • Nisreen Moosa
  • Vikash Ramiah
  • Huy Pham
  • Alastair Watson

Abstract

The ongoing trade war (or at least dispute) between the US and China has its roots in the early 2000s when American politicians and economists started complaining about the US trade deficit with China. Accusing China of wrong-doing, as far as the US trade deficit is concerned, is based on the three propositions that the yuan is undervalued against the dollar, that the trade deficit is caused by currency undervaluation, and that Chinese trade and exchange rate policies are illegal or at least immoral, designed to promote Chinese exports and obstruct imports. These propositions are examined critically, and empirical results are produced to show that the revaluation of the yuan and the imposition of tariffs will not produce the desired results.

Suggested Citation

  • Nisreen Moosa & Vikash Ramiah & Huy Pham & Alastair Watson, 2020. "The origin of the US-China trade war," Applied Economics, Taylor & Francis Journals, vol. 52(35), pages 3842-3857, July.
  • Handle: RePEc:taf:applec:v:52:y:2020:i:35:p:3842-3857
    DOI: 10.1080/00036846.2020.1722797
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    Cited by:

    1. Sabrine Ferjani & Sami Saafi & Ridha Nouira & Christophe Rault, 2022. "The Impacts of the Dollar-Renminbi Exchange Rate Misalignment on the China-United States Commodity Trade: An Asymmetric Analysis," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 20(3), pages 507-554, September.
    2. Afonso, António & Mignon, Valérie & Saadaoui, Jamel, 2024. "On the time-varying impact of China's bilateral political relations on its trading partners: “Doux commerce” or “trade follows the flag”?," China Economic Review, Elsevier, vol. 85(C).
    3. Chih‐Hai Yang & Kazunobu Hayakawa, 2023. "The Substitution Effect of US‐China Trade War on Taiwanese Trade," The Developing Economies, Institute of Developing Economies, vol. 61(4), pages 324-341, December.
    4. Deepika Krishnan & Vishal Dagar, 2022. "Exchange Rate and Stock Markets During Trade Conflicts in the USA, China, and India," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 14(2), pages 185-203, May.
    5. Shi, Yujie & Wang, Liming & Ke, Jian, 2021. "Does the US-China trade war affect co-movements between US and Chinese stock markets?," Research in International Business and Finance, Elsevier, vol. 58(C).

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