According to economic experts, the current trade war between the U.S.A. and China has escalated to affect the whole world. Were it not for Donald Trump’s assault, trade services between the two countries would be as smooth as they have always been.
Exports from China and the U.S. have been dismayed amid the war that is impacting not only the two economic giants but the entire world as well. Basically, the two states have increased their tariffs on each other. The effect can be felt by other countries that rely on goods and services from these two countries.
Effect on China’s Economy
China, which has already suffered another blow to its credit, is now struggling to put the economy back in shape. Reports from Beijing indicate that the state has a growth target of 6.5 percent by the end of this year and is determined to keep things working. The government insists that other important sectors in the economy remain robust, and this will support the country as much as needed.
Some government officials have claimed that the balance between all sectors that support the economy may be tricky, but the economy will make it. The uncertainty of how the relationship between the two countries will evolve poses a threat. Even though the trade war between America and China is a threat to the economy, experts are optimistic that things will get back in shape.
What the Data Says
The adage that data never lies can apply here. According to the China Federation of Logistics and Purchasing, there was a fall in the Purchasing Manager Index (PMI) from 51.2 to 49.8. This is a red flag that things are not good. It also happened when the target was 51.6. Further, China claims that the orders and backlogs have also gone down, not only from the U.S. but from other countries as well.
One other country that has been affected is S. Korea, which is the key supplier of computer components to China. Again, the data show that S. Korea sends 25 percent of its exports to China. For now, there is a decline to about 10 to 15 percent. All the effect can be attributed to the impact of the trade war between Donald Trump’s superpower state and China, which is one of the largest economies in the world.
Some experts have agreed that certain companies had foreseen this war and withdrew from international business opportunities. Every business person with enough experience could understand too well what the war between the two countries means. It is a tough thing that calls for intervention through bilateral talks to cool the waters. As of now, experts say that things are not so good. There is a big challenge that needs resolution.
Some economists are of the opinion that the Trump administration and China must sit down and solve this issue before it escalates further. The friction can be felt across the whole world. As things are, 2018 will continue to experience a slump in the global economy unless something happens.