The impact of the US-China trade war on the global macroeconomy

Abstract

In recent times, one of the major issues currently affecting the global economy has been the trade war between the United States and China. This paper examines the impact of the US-China trade war on the global macro economy, including U.S. tariffs, real exports, macroeconomic indicators, and production structure. This paper finds that increased U.S. tariffs on China not only reduce the welfare of U.S. consumers and firms but also cause a domino effect throughout other regions that significantly impact the global trade structure. The US-China trade war, with its complexity regarding taxes and extensive geopolitical implications on current economics, proves itself to be an interconnected entity dictating the course of the present world economy. Based on examining some essential elements, from real exports macroeconomic parameters, the trade conflict has merely exceeded the bilateral dimension and now marks even the global economy. Therefore, the dynamics of this trade war call for global collaboration and advanced planning to guard against its wide-ranging implications.