The Trade War Between China and the US May Officially Revive the Silk Road

The Trade War Between China and the US May Officially Revive the Silk Road

The opposition towards the trade war between the US and China has been enormous, with analysts from both countries unable to quantify the future repercussions of the ongoing dispute. As negotiations on the tariff laws continue between the US and China, there’s a reason to believe that the trade war may leave China substantially better off than its adversary.


The current trade war arose due to President Trump and his administration holding the belief that the Chinese government and companies have been conducting unfair practices, such as stealing intellectual property and forcing American companies to hand over valuable proprietary technology. The Chinese Ministry of Commerce has accused the US of “typical trade bullying” and that China is “forced to strike back” in attempts to safeguard the nation's interests. Critics have argued that the current US-China economic relationship will negatively impact the business operations currently held within China. The two giant economies seem far from reaching a deal, as both nations appear to be ready to see which side can endure the most pain. Many economists have argued that China will need to take more aggressive measures to stabilize its growth as exports to the US have declined over 3.7%. Other reports have shown that the trade war may reduce the official GDP from 0.5% to 2%.


Recently, Chinese manufacturers have been faced with a complex predicament.  Due to the significant decline in exports, the Chinese manufacturers have begun shifting their supply chains into South East Asia, which has pushed the Chinese government to begin looking into trade opportunities with other neighboring nations. This is something that plays into China’s grand scheme to become the world’s greatest superpower.


The Chinese belt road initiative, also known as the revival of the Silk Road, may be the most ambitious infrastructure plan any nation has undertaken. Launched in 2013 as the “one belt, one road” initiative, it involves China underwriting a multi-trillion dollar infrastructure plan to link nations along the ancient Silk Road route, ending in Europe. And it seems to have paid off: diplomatic relations between China and the majority of the nations along the new silk road have improved dramatically as a result of the new partnerships. The project is surely aiding Mr. Xi’s long-term goal: to dominate Eurasian trade and challenge China’s great geopolitical and economic foe: the United States.


Since the United States made the choice of enacting large tariffs on Chinese products, analysts have argued that this would be a long term self-deprecating act by the United States. The United States currently imports the most amount of goods from China in the world - almost $505 billion worth in 2017 -  while only exporting $130 billion worth to China. This broad strategic maneuver by the United States and other questionable political tactics by the nation’s president has lead to a great deal of skepticism from other nations about the US’s trade security. Meanwhile, it seems that the Chinese government may be able to celebrate the embarkment of their initiative, while the United States will remain idle in its stance on the trade war outcome.

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