Effects Of US-China Trade War On Ordinary People Effects Of US-China Trade War On Ordinary People Effects Of US-China Trade War On Ordinary People

Effects Of US-China Trade War On Ordinary People

One of the hottest topics in recent years has been the trade War between two economic superpowers of the world, the United States of America, and China. This is a global trade war with huge effects on different countries of the world, the workers and ordinary people are the most important losers of this global war of the 21st century.

What are the effects of the Us-China trade war on ordinary people? In this article from Aron Groups Broker, we want to answer this very important question.

Table of Contents

Introducing The Trade War

First, it’s worth speaking about the meaning of the trade war.

  • The trade war is a term that refers to increasing tariffs on imports of another country, this will usually result in the increase of the tariffs by that country for its imports from the country that started the trade war

Many reasons create trade war, this is a situation that we have now between two of the most important economies of the world.

The United States of America and China are now in the middle of a great trade war affecting not only the economies of these two countries but also the whole world.

Reasons For Trade War In The World

Many reasons can lead to a trade war in the world.

As we are speaking about the United States of America, and China, we want to explore the reasons for the trade War between these two countries.

What are the reasons for the trade war between the United States of America, and China?

  • China has exports multiple than the United States of America
  • China is the second-biggest economy in the world and is expanding exponentially, a major threat felt by the major superpower of the world
  • As China has chapter workers, the products of this country are cheaper compared to the US
  • A huge amount of capital has been transferred to the mainland of China, as this country has lower production costs and tax rates, and also has over a billion cheap workers

All of these are reasons that have fueled the war between these two countries, and we are now facing a very controversial trade war between the United States of America, and China.

But, this global war is affecting the whole world population and especially ordinary people in the world.

We want to speak about this topic in the next section of this article.

Effects Of US-China Trade War On Ordinary People

Both of these countries want to benefit from this trade war, expanding their exports and better managing and growing their economies.

But this trade war is hurting ordinary people in different countries of the world, here we want to speak about the top 10 effects of the trade war on ordinary people.

#1. Higher Prices of Products For US Consumers

This trade war increases the export expenses for Chinese products, and consumers in the United States of America have to pay more for the product.

  • This especially is important for lower-income home population, these people have lower income and are dependent on the cheap Chinese products
  • This can hurt them, increase their expenses, and they have to experience higher debt rates that will affect their life in the long-term

Overall, such a condition can decrease the social welfare of these consumers in the lower ladder of income in the United States of America.

#2. Higher Prices of Products For Chinese Consumers

Higher tariffs on US exports are retaliation by the Chinese government but affect the counserms in this country.

  • This can increase the product prices for Chinese companies, as most of the US exports are high-tech products used in the production of many different products in China
  • This can increase the costs of production, and lower their capacity for experts leading to lower export and trade growth rates in China’s economy

Also, people that use high-quality products of the United States of America, have to pay more and this can lead to lower social welfare for these groups in the Chinese population.

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#3. Lower Jobs For Chinese Workers

Trade war has a serious effect on the Chinese workers, this can be among the hardest hits of this war for China.

  • Increasing the costs of production will decrease the exports and income of the different companies
  • Such a condition can results in the lowering of the number of workers to manage expenses and keep the businesses working
  • Also, lower incomes for the companies can decrease the wages of workers having jobs but experiencing lower levels of social welfare

#4.Lower Growth Rate In The World

The economic growth rate of the world is the most important indication that can show the condition of the world.

A higher growth rate means expanding prosperity across the world, while a lower growth rate means difficult conditions for many people across the world.

  • A great trade war between the United States of America, and China means a lower economic growth rate for the whole world
  • Increasing costs of production will lead to a higher unemployment rate in the world, decreasing the total supply and this means lower GDP for the earth’s planet

#5. Increasing Unemployment Rate In The Poor Countries

One of the most important things about Chinese products is that there are millions of workers working in their countries to produce a product in mainland China.

  • This trade war will decrease the number of jobs in these poor countries and lead to a higher unemployment rate

This is the first effect, if we deeply explore this condition, such a scenario will increase immigration in the world, leading to an immigration crisis that can hurt richer countries in the region.

This region is in Southeast Asia, and the rich countries in this region are Malaysia, Japan, South Korea, Taiwan, and China.

#6. Lowering World Trade

The trade war between the two biggest economies of the world will disrupt the world supply.

  • World trade will decrease, all countries of the world are dependent on the United States of America, and China’s economy
  • Fewer exports and imports growth rates mean increasing inflation rate, John unemployment rate, more immigration to metropolitans, and wider crises for different countries across the world

#7. Lower Economic Growth For Different Countries Of The World

It’s interesting to know that China has a $4T trade volume, and the United States of America also has around $3T trade volume with the world.

  • For rather than all countries of the world, these two counties are the two biggest trade partners
  • Now, if China and The United States of America’s economic growth rates decrease, this means lower exports to other countries to these two countries that can lower their economic growth rate

The economic growth rate is very important, and any negative changes have significant effects on the people of that country.

#8. Hurting Countries Exporting Energy To China

China is the biggest consumer and importer of the energy products such as oil and gas in the world.

  • A lower economic growth rate means this country needs lower energy, hurting the income of the energy producer countries such as Russia, Saudi Arabia, Qatar, Iran, Canada, and …

#9. Higher Inflation Rate

Lower supply in the world means a higher inflation rate.

  • The trade war between the United States of America, and China leads to a higher inflation rate in the world

Now that the world has different crises such as the Covid-19 pandemic, the Russia-Ukraine war, and global warming, this trade war is fueled by the fire of inflation rate caused by these major risks of the world.

#10. Fewer Options For Consumers

When we speak about higher production costs, we are also talking about lower supply.

  • Consumers will have fewer options as Chinese and American brands are exporting lower due to higher costs and inflation rate

The Bottom Line

As it’s clear, there are severe consequences caused by the great trade war between the United States of America and China.

We think that this war will become harder and can expand to other products, causing more serious problems for the world.

This trade war is a major risk affecting financial markets seriously and must be on the radar of investors and traders.

For any questions about this article or to start your successful investment or trading, contact AroGroups’s’ customer support team.