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Effects of US-China trade war


Sophia

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Hi Sophia,
The world economy is already facing a 3% contraction this year. Such a slump only happened during the Great Depression. Recovery from such an economic schism is not guaranteed and could take a long time.
This economic schism faces an additional danger in the form of a trade war between China and the US. Should tensions escalate, it would morph into a conflict strongly weakening the world economic recovery from the pandemic.


Another danger lies in stifling critical technological innovations. Before the pandemic, economic experts warned a worsening US/China conflict stood in the way of development in super-fast 5G networks and artificial intelligence.


The US wishes to stop Huawei’s collaboration with US firms, by preventing Huawei obtain or make semiconductor chips with the US-made technology and software. 


Another trade war between the two economic superpowers would take a big toll upon consumers and businesses. For instance, in March 2020 alone, US farmers and enterprises paid tariffs in excess of $3.9 billion due to this trade war.


The Covid-19 pandemic has wreaked unparalleled havoc on US/Chinese farmers and businesses. A tariff set back is the last thing any firm would have to worry about during and after Covid-19 pandemic.
 

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