China will search for other markets to import from

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China will search for other markets to import from them instead of importing from USA like Japan, South Korea and Europe. International Monetary Fund warned that Trump's trade war could cost the global economy $430 billion, equivalent to 0.5% reduction in global economic growth. (IMF, 2018) Political Consequences: Persistent trade deficits in developed countries recently have driven the politicians there to support populist and nationalist policies to defend the national production by imposing tariffs to restrict imports and foreign competition. This leads to the return of protectionism and rise of populist, nationalist and anti- globalization waves. Moreover, Trump's tariffs didn’t affect China only, but also Canada and European Union as he imposed tariffs on their imports, but they retaliated by imposing tariffs on big lists of US imports. So the impact of trade war has extended to other major players in the international market, which deteriorates the global trade volume and global economic growth and stability. In addition, trade war has shown the power of the newly emergent international powers particularly China. Analysis of Graphs: 1 Trade diversion is when the country, as a result of imposing tariffs on its imports from another country, decides to import from a third country that produces the same product but with higher costs or lower comparative advantage. (Dominick, 2013 )
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7 (USCBC, 2018 State Export Report, 2018) From 2009, US goods exports to China increased till 2014, and then in 2015 and 2016 they declined by 6%. In 2017, goods exports increased by $14 billion more than its exports in 2016, resulting in volume of exports of more than $127 billion. Moreover, US exports to China in 2017 increased by 86.2% from 2008 to 2017. This significant increase outweighs the increase in US exports to the rest of the world which was only 21%. In addition, US exports to China increased jobs and benefited US employees and firms. Most of these exports include vital industries like transportation equipment, agriculture, computers and electronics. (USCBC, 2018 State Export Report, 2018) Regarding US services exports to China, it is apparent that services exports are increasing continuously from 2007 till 2016. In 2016, the services exported to China recorded the first surplus of $52 billion. In that year, US services exports to China increased by 12% while they increased by 0.6% to the rest of the world. The decade from 2007 to 2016 witnessed increase of exports to China by 300% while only 50% to the rest of the world (USCBC, 2018).
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8 This reflects the strong trade relations between China and US and the major importance of China as third largest importer of goods and services after UK and Canada. (US, 2018) In 2001, China joined WTO and has become attractive for huge FDIs and a large export- oriented economy (Politicalfact, 2018). Chinese exports share of global exports increased since 2001 from 8% to 13%, which is more than share of US exports which was only 8% or 9% (WTO, 2018). The Chinese trade progress contributed to its trade surplus, increasing the number of countries to which it began exporting, and widening the trade gap with US. Trade
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