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DOI: https://doi.org/10.33258/birci.v4i4.3073
The Trade Saga between Land of Uncle Sam VS Land of Bamboo Curtain
Margareta Sevilla Rosa Angelin1, Deforty Jihan Farun2, Farida Danas Putri3, Tomy Michael4
1,2,3,4Universitas 17 Agustus 1945 Surabaya, Indonesia
[email protected], [email protected], [email protected], [email protected]
I. Introduction
In trade activities between United States and China, there is very tight economic competition. Its causes they two have nature ambition that have goal of controlling the world economic sector. In 2018, US took the decision to increase almost 50% of special tariffs from China, then China responded quickly that action, that wasn’t appropriate and made China increase import tariffs more than 70% at the end of 2018. In addition, US has an ambitious that’s put forward “Make Anerica Great Again” which is considered to be able to increase the spirit aimed at retoring the glory of American products and defeating Chinese products that increasingly dominate the trade sector in goods and services which is increasingly spreading and starting to dominate the world, including US that started received a lots China products.
In China, there is an economic developmeny strategy introduced by the Chinese Prime Minister, Li Keqiang, who mentioned “Made in China 2025”. That strategy is a comprehensive plan to make China in advanced producer that aims to develop and streghten the sustainable economic development sector.
In the illustration above, it can be seen that the war between US and China in international trading sector has began. In this research will discuss the development of the trade war between US and China, which starts from the causes of the conflict. Then, it will, include with some description of the resulting impact with causes an indicator effect of incertainty in trade policy not only on the country concerned, but will also affect to other countries, especially in export and import activities. The impact of the conflict has raised fears of an increasingly heated conflict, but in the period of his new power grip, the President of the united States is considering a study to defuse the conflict which is in process and to be re-operated. Then in this research describes the rational framework around future trade policy actions in dealing with trade war conflicts starting from 2018 to 2021. This research offers a
Abstract
The purpose of this journal is to prove the facts that occurred during the trade war between the United States and China, which will then bring out solutions that can be offered to major problems between the two countries. Based on the facts, both in the form of chronology and the impact arising from the trade war, this research can narrow the distribution of the data and draw a common thread to see what solutions are offered, so that there is no overlap between the news and the facts. Starting from a cooperative relationship between the two countries, which then led to disputes and even tensions between them. Not infrequently in bilateral relations, there can be trade wars between the two countries. Such as comments on the trade war that occurred
between the United States and China.
Keywords
United States; China; trade war
Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Volume 4, No. 4, November 2021, Page: 10337-10341 e-ISSN: 2615-3076 (Online), p-ISSN: 2615-1715 (Print)
www.bircu-journal.com/index.php/birci email: [email protected]
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novelty, it is the agreement between US and China, which has a great opportunity to restore the conditions of the rate of trade relation between those two countries and other countries that have connection on a trading sector with them.
The first comparison of research can produce answers to overcome the problem of the trade war that occurred between US and China which has an impact on other countries, especially ASEAN countries, and then from that ASEAN present RCEP (Regional Comprehensive Economic Partnership) to help their economy progress, through cooperation between countries regardless of how much it will be obtained so that it embodies the concept of absolute gains from the point of neoliberalism. The offer of solutions to the impact of the trade war between US and China on other countries, especially ASEAN it has a difference with this research because the concept of presenting RCEP only covers the scope of countries that are part of ASEAN, while there are still many other developing countries outside ASEAN that depend on exports and imports from the US and China. The second research shows, the conclusion that the existence of a trade war actuallu doesn’t have a significant effect on international trade. In contrast to this research, the researcher saw if the occurs trade war between US and China has the impact that will be difficulties for developing countries, that depend on their export import activities to US and China, because these two countries didn’t export their products properly, one another resulting in build up products in the US as well as China.
Referring to studies that have relevant themes to this research, the formulation of the problem that arises is the importance of resolving the trade war between US and China for the smooth pace of various related countries and the continuity of good trade relation between these two most influential countries in the trade sector.
II. Research Method
This journal wroten uses a normative research method which further develops the study of the facts that occur and relates to laws that goverming it. That method is really important cause can reveal the common understanding of what good legal research by linking facts to the law rules. So, that the results of this research can be more objective.
III. Result and Discussion
3.1. International Trade and GATT of WTO
Trade is one of the important factors contained in a country, it is a building factor, especially in the economic sector. Even developed, countries also need cooperative relations with other countries, especially in the trade sector or the things that is commonly reffered to the international trade sector. For both developed and developing countries, the international trade sector havge the most important position, which is used as an opportunity to improve the welfare of the country. This international trade sector will determine foreign exchamge that country from export abd import sectors.
Trade with other areas even though the amount is very small, but plays an important role in our economy. Salt, Fish Salts, and opium are all luxury items that can all be from the coast. (Suprayitno, et al. 2019)
There is very important source of law in the international trade sector, it is General Agreement on Tarrif and Trade or commonly reffered to as GATT. In GATT, various provisions regarding international trade tarrifs are regulated, including the policies of countries regarding tarrifs that are made to protect products from their countries as well as to attract income from the countries concerned. GATT has never prohibited tarrif increases
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made by countries under its auspices as long as the policy is not discriminatory and must still comply with what is determined by the GATT or WTO.
The trade war reffered to here is often interpreted as an increase in tarrifs between countries with trade relations. Trade wars always affect to other countries, especially developing countries. In the world trade, trade war is not a form or violation, because it is also an economic conflict between countries whose solutions can still be found through various negotiations nd collective agreements.
3.2. Trade War between USA – China
Began on January 2018, during the Trump administration, trade relation between US and China hve become increasingly strained. The trade war began when the President of United States, Donald Trump, felt that there were unfair trade practices camed out by china against the US by looking at the deficit trade balance of the US with China. This was discovered when the result of a research that conducted by President Trump’s adviser in the trade sector, Robert Lightnizer, for 7 months. Robert concluded that China’s trade practices contained injustice to the United States. In that research, it turned out that the United States also found that there were facts that China had cost the United States hundreds of billion of US$ for China’s attempt to steal intellectual property belonging to the United States through digital or computer network. The tensions that have occurred in this trade war are the worst in four decades since the restoration of diplomatic relations between those two countries.
President Donald trump feels that steps must be taken to root out trade injustices. Trump made policies to increase import duties on technology (solar panels and washing machines) and raise import duties on aluminium and steel. The amount of the increase is around 50US$
- 60 US$ billion for Chinese products that exported to US. There was an increase in the import tariff for a steel and aluminium as well, around 25% and 10% that coming from China, which was announced on March 1st 2018. Until finally Trump’s decision made China didn’t want to lose and increased the cost of importing foodstuffs from China. The fight against the increase in tariffs make the trade was happening. Even after a year had passed, in 2019, US and China continued to heat up their traderelations. They continue to increased their country’s tariffs. Even though there have been many negotiations, there is still no agreement between US and China. These trade war has brought those countries’ economic relations into uncertainty.
The occurred trade war between United States and China certainly had an negative impact, especially for developing countries, including vASEAN member countries, which of course depend on exports activities from US and China. They are like Singapore, Vietnam, Malaysia, and Thailand. That impact happened on export – import sector or investment figures. So these trade war between US and China also referred as a “domino” because of it’s nature which not only affects the trade of these two countries, but also ios felt by countries that have trade relations with US and China. World Trade Organization (WTO), as a trade organization in the world also stated that the trade war between US and China could cause the decline in economic global economic growth. Like the increase inj import tariffs on steel and aluminium, actually it will also become “a weapon of choice” for United States itself.
This is because not only China will feel the threat of increasing import tariffs, but also other countries such as South Korea, Mexico, Canada, European Union, Argentina, Brazil, and Australia, which are trading partners of thye United States, although in the end the policy wasn’t realized. This trade war is also predicted to affect global supply chains, requiring companies involved in recalculating production costs and routes. So, not only companies that must be prepare, but consumers also to support the new economy.
Although the leadership of the United States has passed into the hands of Joe Biden, so
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far no steps have been taken by Biden and his cabinet to resolve the issue of his country’s trade war with China. In fact, there are estimates that the war will heat up in Biden’s government. Biden has been negotiating with his allies to discuss continuing ton root out a country which he has committed economic abuses in many areas. All of the files on the trade war agreement are currently being reviewed by the Biden cabinet and do not show any negotiations leading to an easing of the trade war between US and China.
IV. Conclusion
By referring to the in the bintroduction and discussion include the result of the research, not can be concluded that bilateral relations between two or more countries that are not always good, such as onset of a tradew war between the United States and China, will have an impact on the economies of other countries that depend on exports and imports activities of US that China. If the war continues, the chances of developing countries experiencing a deficit will be even greater. Due to the rate of export and import of these countries to the US and China will also be hindered.
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