Abstract
The trade war between the US and China has led to global instability, this makes studying this topic very important and sensitive. This study aims to show the impact of the trade war on both the United States and China, by studying both US and Chinese companies before and after the trade war.Although the trade war is still ongoing and has not ended, but it is long enough to judge its impact on the two countries. In this study, the value at risk was used as a tool to compare the size of the risks to both the US and Chinese portfolios before and after the trade war, the results showed that the VaR of the US and Chinese portfolio after the trade war was greater than the VaR before the trade war, This means that the two countries were affected by the trade war.However, the results also showed that this change in the VaR of the US portfolio was greater than the change in the VaR of the Chinese portfolio, this means that the US portfolio has been more affected by the trade war than its Chinese counterpart.
Highlights
We are all witnessing that day when President Trump declared a trade war against the People’s Republic of China
The value at risk was used as a tool to compare the size of the risks to both the US and Chinese portfolios before and after the trade war, the results showed that the Value at risk (VaR) of the US and Chinese portfolio after the trade war was greater than the VaR before the trade war, This means that the two countries were affected by the trade war
It turned out that this trade war has affected many international companies, including US and Chinese, according to an International Monetary Fund (IMF) report, an escalation in the US-China trade war will damage the manufacturing industries of both countries and is likely to cause job losses, but it will not change anything in the overall trade balance of the two countries, the IMF said in its April Global Economic Outlook report that the United States and China would suffer “heavy” manufacturing losses, with production capacity shifting to Mexico, Canada and East Asia if tariffs rise to 25 percent on all products flowing between the two countries
Summary
Applied Science and Innovative Research ISSN 2474-4972 (Print) ISSN 2474-4980 (Online). An Empirical Study on the Impact of Trade War on Both the US and Chinese Economies, Based on the Value-at-risk Approach. Mohammed Djebbouri1*, Mahmoud Laouni2 & Abderrahmane Tahi Finance and Banking Department, Moulay Tahar University, Saida, Algeria 2 Management Sciences Department, Moulay Tahar University, Saida, Algeria * Mohammed Djebbouri, Finance and Banking Department, Moulay Tahar University, Saida, Algeria.
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