Moreover, open economies were proved to grow three times more than the closed economies. (OECD, 2010). However, Recent data has shown a persistent increase in the trade deficits of developed countries as a repercussion of large increase in volume of international trade, particularly USA which suffers from a huge deficit with China. This induced the countries to adopt protectionist policies by imposing tariffs and non-tariff barriers like Voluntary export restraints and quotas (Dominick, 2013 ). Some countries have engaged into a trade war through imposing retaliatory tariffs which would have unexpected ramifications for the global economy, especially the escalated trade war between two of the strongest economies like China and US recently. An international trade war hinders economic growth, increases goods prices and promotes
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4inflation. It costs jobs, causes inefficiency and reduces the volume of international trade. It disrupts global supply chains and creates trade diversion which is inefficient. Moving to some empirics, there were some trade wars occurred throughout history like Opium war between China and Britain from 1839 to 1860, the Anglo-Irish war after 1932, the Banana wars in 1993 (International Relations EDU, 2018), and the recent case of US-China in 2018. Methodology: The paper uses descriptive analysis to explain some graphs that tackle important variables like US exports of goods and services to China and trade deficit between US and China from 2001 to 2017. Trade deficit is when the imports are greater than the exports and it is a common type of imbalanced net exports. It can occur in both goods and services, or one of them as in the case of US and China, where US has deficit in goods but surplus in services as will be explained later. Empirical Analysis: USA started a trade war against China since 2018. Several reasons provoked president Trump to impose huge import tariffs and begin unilateral trade war against China. Firstly, He admitted that China has unfair trade relations with US. US suffer from a huge persistent trade deficit of about $375.23 billion in its trade balance with China. He wanted to reduce the trade deficit with China by restricting Chinese imports. Moreover, Trump administration has asked China to reduce the bilateral trade deficit by $100 billion (Martin, 2018). Secondly, Trump complained about Chinese individuals and firms' alleging of technology transfers by licit and illicit means. He accused China of stealing the American intellectual property by forcing the American technology-intensive firms to enter joint ventures with the Chinese firms to transfer their technologies to enable the American firms to operate and have access to the promising Chinese markets. It is estimated that Chinese theft of American intellectual property costs the American economy about $225 to $600 billion annually, as well as costing a lot of American jobs(M & P, 2018).Trump hoped that by imposing tariffs on Chinese imports, particularly in
5R&D and technology-intensive products, China will revise its policies, stop manipulating its
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