Which Country Will Benefit Most from Resolution Of Trade Issues Between China And U.S.?

There would be little doubt that a full-blown trade war would harm both the United States and China. This was a near unanimity view of most of the economists though any trade between the two countries is historically termed as a ‘cooperative one.’ As things have reached a tit-for-tat reaction between the two big economies, it clearly suggested that cooperation was somewhat deteriorating. However, the moot question is who will gain if the two countries resolve their differences in their trade disputes.

Gains or Losses of Majority

One of the big issue arising out of the trade disputes is the kind of losses that majority of the people in both the country are estimated to suffer. That is especially for those engaged in particular segments and activities of the population. Though there could be some winning moments or sectors, the kind of losses due to tariffs war would not be easy to judge or leave alone. Also, it would not be an easy task to offset the losses due to the trade disputes escalating to a wider war.

According to a Bloomberg, it is quite natural that both the countries are worried about the losses than the gains due to the additional tariffs. Interestingly, both the countries’ officials were reportedly talking to each other to find an amicable solution. Therefore, there is an expectation that the discussions would lead to a fair and still free trade between China and America. This could be similar to the hopes raised in the negotiations to update the North American Free Trade Agreement (NAFTA) between Mexico, Canada, and the United States.

Any resolution of trade disputes between the two countries would allow China to gain more than America. The Asian nation is also aware of the compulsions and the pressures being exerted by external forces on excessive trade and property barriers. As a result, the country is now set to quicken three long-term transitions policy. The key point is that China has embarked on it willingly thus understanding the current situation.

The country has invited criticisms for its negative attitude, which the economists called as ‘middle-income’ transition. The Asian nation has moved away from exports gradually and trying to meet its demand internally. This also resulted in moving towards private consumption from inefficient investments made by state-controlled enterprises.

Reducing Trade Barriers

The report suggested that the best course available for China is to reduce not only trade barriers but also stick to accepted intellectual property norms. This would be in line with the second key developmental transition for the country. Its constant increase in its readiness to accept more responsibilities would also be in line with its overall size in the International arena.

China’s growth rate has slowed from the pre-2010 or the early 2000 year periods. Therefore, it is compelled to hold closed-door negotiations so that its long-term prospects are intact rather than avoiding it altogether. However, the country will be forced to have a similar dialogue with Europe. This would only help the middle-income transition in the country.