The origin of the US-China trade war

Nisreen Moosa, Vikash Ramiah, Huy Pham and Alastair Watson

Applied Economics, 2020, vol. 52, issue 35, 3842-3857

Abstract: The ongoing trade war (or at least dispute) between the US and China has its roots in the early 2000s when American politicians and economists started complaining about the US trade deficit with China. Accusing China of wrong-doing, as far as the US trade deficit is concerned, is based on the three propositions that the yuan is undervalued against the dollar, that the trade deficit is caused by currency undervaluation, and that Chinese trade and exchange rate policies are illegal or at least immoral, designed to promote Chinese exports and obstruct imports. These propositions are examined critically, and empirical results are produced to show that the revaluation of the yuan and the imposition of tariffs will not produce the desired results.

Date: 2020
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DOI: 10.1080/00036846.2020.1722797

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