Problem:
According to this article, "Who Won the U.S.-China Trade War?" from the Wall Street Journal, between 2018 and 2020, the U.S. and China fought the biggest trade war since the 1930s. But why did they do it? Your text claims that free trade generally benefits all parties involved (Chapter 6). Still, governments have long intervened in the trade of goods and services (Chapter 7).
Discussion questions:
Based on your reading of Chapters 6 and 7 of the textbook and relevant credible sources, such as the above cited Wall Street Journal and this article, "The trade war within China", from The Economist, consider the following questions:
Do you still believe that this type of trade war is good for the people of the countries involved? Why or why not? Think from the perspective of all stakeholders: governments, producers, support industries, logistical companies, sellers, and end-users.
During the trade war, if the United States imposes a higher tariff or import duty on imports from China, who is actually paying the U.S. government: the Chinese government, the Chinese exporters, or the American consumers?
Besides tariffs, what are other instruments that counties use in trade wars?
Should the WTO mediate in this dispute?
Make sure to support your position by citing from relevant publications or other credible sources.
References:
Wild, John, J. and Kenneth L. Wild. International Business. Available from: MBS Direct, (10th Edition). Pearson Education (US), 2022.