The ongoing trade war between the U.S. and China would adversely affect global economic growth, and their
Question:
The ongoing trade war between the U.S. and China would adversely affect global economic growth, and their unilateral actions on trade apparently seem to be designed to bypass the rules set by the WTO, and could thus have a serious impact on global trade and governance. It seems clear that the U.S. is purely diverting attention from its own structural problems, and which are ultimately themselves responsible for imbalances in trade. President Trump, however, is attempting to establish a (probably erroneous) link between rising U.S. imports and the decline in its manufacturing industries. Since August 2018 year, both countries have together imposed tariffs on $100 billion worth of goods and which will almost certainly escalate further with increased trade retaliation.
Source: WorldFinancial Review(Dec, 2018)
(a) Explain the US-China Trade War. [500 words]
(b) Applying game theory, explain the outcome of the game between US and China in terms of high or low tariff strategies. [1000 words]
(c) Discuss how the Trade War will impact of the World Economy. [1000 words]
Multinational Business Finance
ISBN: 978-0132743464
13th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett