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TABLE OF CONTENTS1.0 Introduction12.0 Ongoing US-China trade war13.0 Reasons both countries implement tariffs24.0 Effect of US-China trade war to both countries 35.0 The spill-over on other Asian countries (South Korea and Malaysia)4Referencesi
1.0 IntroductionTrade war is defined as a conflict between the two countries about the tariffs on eachother to protect their own country. This is the side effect of protectionism that occurs whenboth countries have a conflict about tariffs. Usually this conflict arises because they are tryingto improve their own imports and exports. A tariff is a tax that charged on imported goodsand services. Protectionism represents government action and policy that limiting theinternational trade to protect the local businesses and jobs from outside country’scompetition. Trade war can begin if one country sees another country's trade have an unfairor when domestic unions press the politicians to make import items less attractive to theconsumers. Trade war is also one of the misunderstood benefits of free trade.2.0 Ongoing US-China trade warAccording to Dollar (2018), the ongoing US-China trade war that took place betweenthe United States and China had a major issue going on. On 8 July 2018, President DonaldTrump declare that United State imposed a 25 per cent tariff on imported goods that worthUSD34 Billion from China, following tariffs imposed on steel, washing machines, aluminiumand solar panels. After that, the Chinese Government immediately take a revenge with a 25percent tariff on imports of US soy beans, other agricultural products and automobiles.According to Hui (2018), on 24 September 2018, United State escalated the trade war withChina by impose another 10 per cent tariff, and worth USD 200 Billion of China productsand may increase to 25 per cent at the end of 2018. After the increasing the tariff by US,China again retaliated with tariffs on USD 60 Billion of US goods and the same time, theimportance of the good bilateral trade relationship.President Donald Trump says that he wants to stop the unfair transfer of technologyand intellectual property of America to China and he wants to protect jobs. The tariffs will1
make the US products cheaper than the import products and to increase the local consumersto buy the local products. This strategy encourages the local business to improve theirbusiness and support the national economy. However, many of US companies have testified