The trade war between the US and China

Abstract

The recent trade war between the US and China started because the U.S. imposed a 25 percent tariff on Chinese imports. This paper proposes four explanations: the causes of the recent trade war, the impact of the trade war the stock market and the trade, the advantages and disadvantages of the trade war, and some suggestions given to the US and China. I collect data mainly about tariff war between the US and China, China’s trading surplus and US’s trading deficit, and the exchange of the quantity of the export and import between the US and China. Because of my research is a descriptive research study and I collect the historical time-series data from Bloomberg, I will use regression and correlation analysis as my methodology. After analyzing, the results are the trade deficit between the US and China mainly lead to the trade war. And the trade war has a significant impact on the trade, while the US and China’s stock markets are not moving together during the trade war. Moreover, there are many strategies the US and China can take to make up for the loss during the trade war.