Beyond Trade Wars and Economic Nationalism – Towards a Cooperative Global Governance

The US–China trade war in 2019 led to major shifts in global trade and supply chains, highlighting the recent trend in deglobalization. This case discusses the patterns of international trade and capital flows across the two countries, determinants of trade imbalances, and the role of national savings, policies, institutions, and exchange rates. The material allows for an examination of several factors, including the broader context of tech competition between China and the United States. The case raises a series of questions around the uncertainty the trade war created, the impact of tariffs on both economies, and diverging views from the two sides on who is winning. The case has been successfully taught in second-year MBA classes and executive training programs on global economies and markets. Excerpt UVA-GEM-0175 Mar. 17, 2020 The US–China Trade War: Deal or No Deal? At its simplest, the intent of G20 summits was to encourage global economic growth through cooperation among governments, central banks, and international organizations. The seeds of the summits were planted in 1975, when heads of state from six countries, known as the G6, gathered to discuss economic issues. Nearly 45 years later, it had grown into a forum of 20 countries' leaders, and invited guests from nonmember countries and international organizations that met to exchange thoughts and expertise on topics such as economic growth and disparities, sustainable development goals, innovation, infrastructure, global health, and free trade. At the June 2019 G20 summit, two leaders–US president Donald Trump and Chinese president Xi Jinping–attracted a lot of attention because of the trade war between their countries. A trade war was an economic conflict resulting from trade when nations used tariffs or other against each other to gain advantages in trade, business, economic, and political positions. Since 1947, tariffs between countries had been falling in line with the General Agreement on Tariffs and Trade (GATT, originally signed by 22 countries) and its 1995 successor the World Trade Organization (WTO, with 164 member countries in 2018), from a global average of 22% to less than 5%. The resulting boom in trade led to the coining of the term globalization, meaning the integration of national and local economies, along with social and cultural elements. But in the second half of the 2010s, protectionism reasserted itself in grand fashion as the United States and China–the world's two economic superpowers–initiated rounds of tariffs, counter-tariffs, and uncertainties amid negotiations on a wide range of imports, exports, and structural trade issues. By June 2019, the United States had set a 25% tariff on $ 250billion of Chinese imports, and China had retaliated with 20% to 25% tariffs on more than 5,000 US products, with the promise of more to come. In early August, Trump promised another 10% tariff on an additional $ 300billion of Chinese imports. The meeting between Trump and Xi at the G20 summit was a pivotal point, crucial to either ending the trade war or resuming stalled negotiations between trade representatives that had been underway for two years. The trade war contributed to China's slower GDP growth in the first quarter of 2019 (see Exhibit 1). . . .

The difficult-to-control processes caused by trade wars and sanctions can be analyzed only post factum, since the large-scale state-level decisions need time to take effect. Modern trade-war methods usually include a collective pressure on the competing country, and the economic leverage is accompanied by the power politics. In recent years, national economies have undergone many crises, trade conflicts, and black swan events. The International Monetary Fund predicts no return to former economic growth rates. The IT industry is an advanced digitalization driver and a promising direction for state investments. The sphere of IT technologies will also have to adjust to the new circumstances. This study focuses on the IT industries of the world’s leading economies and the sanctions policy of the recent years. The research relied on domestic and international scientific papers, analytical reports, statistical collections, and expert assessments related to the topic of international trade wars, political sanctions, and the IT industry. The author considered international trade conflicts both diachronically and synchronically. The current state of the leading economies was described in terms of their GDP. Some experts report the low effectiveness of full-scale sanctions in defending political and economic interests. Since Western Europe and the United States were responsible for most trade wars in the past, they probably find this mechanism beneficial in conducting a dialogue with their opponents. The author believes that the IT industry will be able to adapt to the new economic reality as the era of the unipolar world imposed by the United States is fading into history, triggering inevitable changes in the international economic relations.

“Trade wars” have become a persistent phenomenon in the escalating geo-economic competition between the United States and China. Simulations of several “trade war” scenarios using the GTAP computable general equilibrium model show that increased protectionism will have a negative impact on the economies of not only the United States, but also China, although for both countries the decline in economic growth rates will be limited. The fewer countries are involved in “trade wars” on the side of the United States, the smaller the economic losses for China will be. The unique structural feature of the Chinese economy is the phenomenally high rate of investment and the low ratio of consumer spending to GDP. The growing gap between investment and consumption is covered by a growing positive foreign merchandized trade balance. During the 2000s, Chinese exports largely displaced American manufacturing in labor-intensive, low-tech industries. This process was called the “Chinese shock”. We are currently witnessing a China shock 2.0, as Chinese companies rapidly increase export of not only labor-intensive but also medium and high-tech industrial products. At the same time, China is rapidly expanding exports to new markets. The continuation of the mercantilist course by the economy, whose share in world GDP reached 17% in 2023, is turning into what Joan Robinson in 1936, observing the collapse of the first format of globalization, defined as the “beggar-my-neighbor” policy. China continues to strengthen its position as a global industrial powerhouse. Most countries cannot compete with an increasingly mercantilist China, and their international specialization is obviously limited to raw materials. The problem of foreign trade imbalance, which the US used as a pretext for initiating a policy of protectionism, is not being solved, but is being spread more widely throughout the world economy. China is absorbing effective demand generated in other countries. In 2023, China maintained a trade surplus in goods with 174 countries and territories. 81 countries had a negative trade balance with China exceeding 3% of their GDP. For many developing countries, the growing negative trade balance with China increasingly threatens the maintenance of macroeconomic balance in the national economy.

The relevance of this study is determined by the contemporary role of international trade, which serves not only as an arena for political and strategic confrontations but also as an instrument of economic growth. Trade wars, manifested through tariffs, sanctions, and restrictions on access to markets and technologies, increasingly affect the structure of both the global and national economies. Research shows that trade wars perform a dual function: on one hand, they destabilize international cooperation and trade flows, while on the other, they stimulate economic diversification, the implementation of new technologies, products, and production methods. Accordingly, the article aims to conduct a vector analysis of the impact of trade wars on global and national economic processes and to determine their role as a catalyst for innovative development. The results indicate that, alongside negative effects, trade wars contribute to innovation and the expansion of a state's economic structure at both global and national levels.

Abstract. We focused our attention on the causes of the current trade war between the United States and China. The article analyzes the influence of electoral processes in the USA on the choice between free trade and protectionism. The relationship between China’s accession to the WTO, mutually beneficial cooperation with the United States, and trends in the trade balance between major trading partners have been determined. The article illustrates the main mutual claims between the United States and China, which led to the outbreak of «the largest trade war in economic history». We determined the main stages of the conduct of «military operations» and characterized the directions of the conflict escalation. The attention is focused on the losses in the trade war; the main beneficiaries from the «trade disagreements» were identified. We proposed an alternative opinion on the real consequences of the trade war for the warring parties. The article studies the impact of trade wars on world GDP and the national economies of the largest countries of the world. Attention is focused on the existence of «phantom trade» for finding the way out of sanctions and tariffs. The role of Ukrainian business in trade wars is examined in detail. We analyzed the main trade wars Ukrainian enterprises are involved in and possible results for the business. The article gives the author’s vision of the impact of the trade war on the trade balance between Ukraine and the key participants in the trade war: the United States and China. We concluded which branches of the Ukrainian industry are in priority for developing trade relations with China. The article highlights the main barriers to the development of trade with the United States and the reasons for the decline in the export of Ukrainian goods. We predicted how the improvement in relations between the United States and China will affect the role of Ukrainian business in the context of world trade wars. Keywords: trade wars, export, import, protectionism, free trade, trade balance, trade deficit, import duties, sanctions, tariffs, duties, phantom trade, preferences. Formulas: 0; fig.: 0; tabl: 0; bibl.: 38.

The global landscape of trade has been significantly shaped by the emergence and continuation of trade wars, particularly those initiated in the last decade. This review explores the economic and social impacts of these trade conflicts, emphasizing the shifts in global economic stability and social equity. By examining various aspects such as changes in employment, gross domestic product growth, consumer prices, and international relations, the review offers a comprehensive analysis of how trade wars have influenced global markets, national economies, and societal norms. It discusses the mechanisms of trade wars, their historical context, and recent occurrences with a focus on major events like the US–China trade tensions. Furthermore, the paper evaluates mitigation and management strategies employed by countries and international organizations to navigate and alleviate the pressures of trade disputes. This synthesis aims to provide a deeper understanding of the multifaceted consequences of trade wars and suggests pathways for future research and policy-making to enhance global economic and social resilience.

This article identifies two distinct varieties of economic nationalism in the United States that have strong and lasting implications for transatlantic trade relations and traces their origins to how the two major parties use narratives to form competitive coalitions including trade critics since 2020. The Republican Party links trade critics with culture war supporters, allowing them to enhance their collective impact on domestic and foreign policy, including confrontation with Europe on trade. Democrats’ pursuit of trade critics in 2020 and beyond means a focus on domestic development and industrial policy appealing to centrist and progressive voters, and eschewing trade agreements. This developmental economic nationalism offers room for allied interdependence across the Atlantic.

Trade wars have become a characteristic phenomenon in the development of the modern world economy. The greatest damage to business in the world is caused not only by the global competition in the framework of technological revolution, global pandemic, but by the ongoing trade wars. The global impact of trade wars is the most predictable event in the world for the foreseeable future. A trade war in the truest sense of this combination meant a clash of two states with the use of weapons over a sphere of influence in a certain territory, water area. In a more modern interpretation, trade wars were associated with protectionist policies and measures to protect the domestic market using tariff and non-tariff barriers. The methods of waging trade wars have transformed into long-term economic embargoes, driven largely by political motives with increased international competition. At the present stage, trade wars have affected the digital sphere, they seriously destabilize the economy, they are a weapon for curbing economic development, preventing the integration of national economies into the global world economy, and gaining global leadership by them. The study of the nature and essence of trade wars, analysis of global strategy, modern methods of their conduct in the digital economy are of scientific interest.

Against the backdrop of globalization, China and the United States, as the world's two largest economies, exert profound influence on the global economy through shifts in their trade relations. Since the outbreak of the trade war in 2018, the United States has imposed substantial tariffs on Chinese goods and implemented restrictions in high-technology sectors, while China has responded with reciprocal tariffs and a strategy of market diversification. This conflict has not only reshaped China-U.S. economic and trade relations as well as industrial structures but has also generated extensive repercussions for global supply chains and the economies of other nations. By compiling data on China-U.S. trade, policy updates, and case studies, and employing comparative analysis alongside case study methodology, this paper delineates the key policies and developmental stages of the trade war and assesses its impact on both China and the United States, as well as on the global economy. The findings reveal that the trade war has imposed economic pressures on both nations, while simultaneously accelerating the restructuring of global industrial chains and heightening uncertainty in the international economy.

In August 2017, the US initiated a Section 301 investigation against China’s trade practices, and on March 2018, the Office of the US Trade Representative accused China of unfair trade practices ranging from the forced transfer of technology to Chinese firms and intellectual property theft. For these reasons, the United States continues to impose tariffs on Chinese goods. China followed with a series of counter-measures, which became the beginning of a trade war between the two countries. It has a widespread influence on the global markets, international relations and the stability of national economies. This paper collects the stock price fluctuation and financial risk data of Intel before and after the trade war and makes a comparative analysis of the data. We explore how and when the US Trade War came and was framed. Besides China and USA, is there any other country that has had a substantial positive or negative impact from the US Trade War. Finally, we found that how the trade war affects the stock price and change the financial risk of the firms in China and the USA. According to research findings, the trade war had a negative impact on Internet stock prices and financial risks in both countries.

A VISION OF THE POST-PANDEMIC ECONOMY

The relevance of the presented study is determined by the fact that recently the intensifi cation of the trade confrontation between the USA and China, linked, among other things, to the second coming to power of D. Trump, has again attracted increased attention from market participants and specialists. The purpose of the presented study is to examine the causes and expected consequences of the intensification of the trade confrontation (often referred to as a trade war) between the United States and China as heavyweight countries in the world trade market. The scientific novelty of the obtained results lies in the substantiation that the fact of the trade war unleashed by the United States is a clear and natural manifestation of the global economic crisis of the 2020s. The practical significance of the obtained results lies in the possibility of their use in developing measures to anticipate the impact of a trade war on the national economy.

With fires, floods, storms surges, and heatwaves becoming dismayingly common because of climate change, how can societies adapt to these and further changes? In this context, fisheries have emerged as the proverbial canary in the coalmine and an important test case for the rest of society. The reason is, in part, because the success or failure of fisheries and the communities supported by them is deeply entwined with the state of ocean ecosystems, and because ocean life is often responding faster and more dramatically to the impacts of climate change than are ecosystems on land. Fisheries are incredibly diverse, however, and a major challenge is to understand where to target adaptation efforts. In their paper, Payne et al. (1) provide an especially detailed social–ecological roadmap by examining climate risk to fisheries in Europe. European fisheries provide fascinating examples for climate adaptation. From a climate risk perspective, these fisheries have long been overlooked, in part because European countries rely relatively little on fisheries for food, jobs, or economic value (2). However, fisheries play an outsize role in European society, far beyond their purely utilitarian role in food security, employment, or national economies. This importance was illustrated not least by the fact that fisheries were one of the final sticking points in Brexit negotiations. A subsequent dispute over fishing rights around the island of Jersey quickly escalated, with French and English warships deployed to the area in May 2021. Earlier this century, a dispute over mackerel between the European Union (EU), Iceland, and other countries that has been linked to climate impacts subsequently spilled over into a trade war (3). European fisheries encompass an impressive diversity, from subtropical to Arctic ecosystems and from fleets of small artisanal boats to a 144-m supertrawler. Although much of the climate adaptation attention has rightly focused … [↵][1] 1Email: malin.pinsky{at}rutgers.edu. [1]: #xref-corresp-1-1

The systemic confrontation between the US and China in 2025 has resulted in a new tariff war. Washington's policy of containing China, which began with the first Trump administration and was "picked up" by Biden, did not lead to the desired results. Tariff and sanctions pressure of past years did not restrain the country's emergence as the world's largest economy and a world leader in innovation. The country continued to develop rapidly, increasing its military and economic potential. The next phase of escalation, which began with Trump's return to the White House, involves a multilevel strategy of containing China. On the one hand, in includes new import tariffs aimed at reducing mutual trade between China and the US to a minimum; on the other hand, is seeks to isolate China by pressuring its key trading partners through the imposition of high tariffs on exports to the US. The only option left for Washington to avoid a negative scenario was to conclude trade deals with the US on new terms, which implied a drastic reduction in imports from China, as well as a refusal to turn the signatory country into a platform for re-export of Chinese products to the US. Washington set a 90-day deadline to conclude such agreements, suspending the introduction of the promised high tariffs for all countries except China. In the first half of 2025, Trump aims to resolve the trade issue with most countries in the world, and to reduce China's ability to export its products at previous levels. This is likely to deal a blow to China's national economy, and the country's ambitions and desire to become the world's largest economy will face serious obstacles. The further development of China as a global leader depends on the creation of anti-tariff alliances, efforts to convince countries not to align with the United States, and the expansion of the domestic market through stimulus programs.

The Trump administration is pursuing a “dual track” trade offensive. Track One, announced with US steel-aluminum tariffs, seeks token adjustments to preexisting trade terms with allies in NAFTA (North American Free Trade Agreement), Europe, South Korea, and other US bilateral free trade agreements. The recent South Korea-US negotiations represent the soft template. In Track Two, Trump is pursuing a hard line with China. US objectives are threefold: limit technology transfer to China, obtain more access to China markets for US business, and reduce the US current account deficit with China. US elites are internally split, however, on which objective should be given priority: the US defense establishment prioritizes the first, US multinational corporations and trade groups the second, while Trump seeks the third as means to mobilize his domestic political base with evidence that his “economic nationalist” policies are producing results. China's counter to Trump is a “carrot & stick” response offering concessions to the second and third US objectives, while holding firm on the first. The US-China trade dispute should be viewed as a weak US attempt to reproduce Reagan's 1985 Plaza Accord targeting Japan, and Nixon's 1971 abandonment of the Bretton Woods dollar-gold peg standard, targeting Europe. Trump's offense will prove less successful, however. The author predicts a US-China full blown trade war will be averted, as Trump and US capitalists settle for gains in objectives two and three, while denying China acquisitions of US corporations.