How Does China Respond to U.S. Trade Protection Policies?–The Perspective of Game Theory

Abstract

Why the United States took the lead in adopting trade protection policies is the most critical issues in studying Sino-US trade relations. This paper answers this question by constructing an economic game model and integrating political game ideas. That is to say, in the economic perspective, if the United States predicts that the protection strategy may bring great benefits to the country, adopting a free strategy will bring more benefits to the country, and it is expected that the protection measures taken by the country will cause the damage caused by the retaliatory actions of the other party to be small. The United States has a strong incentive to adopt trade protection. The political point of view is mainly the reasons for the United States’ persistence of the “terrorism” mentality of the second country, the “first US” belief, and the intention to hold the Chinese technology throat.