Introduction
It is no longer a secret that the United States and China are on a serious engagement in economic disputes. The two nations being among the superpower countries play a very vital role in controlling the world’s economy. Thus, the current economic war between the United States and China not only affects the two nations’ economic growth, but also the rest of the nations, such as the UAE, whose economic growth and development relies on the two nations. This report addresses the following details regarding the current economic dispute between US & China:
Summary of the details of the trade war between US and China.
The opportunities for UAE regarding the trade war between US and China.
Challenges for UAE in line with the US-China economic disputes.
Implications that the US-China trade war has on the UAE economy, and the UAE-US relations and UAE-China relations.
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Summary of the Details of the Trade War between US and China
The main details surrounding the US-China trade war are as follows:
Trade tensions between US and China. This has and continues to cause devastating effects on the world markets (“Word Market”, 2019). The overall effects to the US-China trade tensions is decline in the global financial markets as the US decides to hike her tariffs following the Beijing trade deal row back.
The US continues to threaten imposing more tariffs on Chinese-made goods (Bradsher & Swanson, 2019). This is aimed at forcing China to come to trade negotiating deal. Chances are high that the US may further increase the tariffs as China has shown little concerns to engage in talks with US.
China is experiencing economic breakdown following her trade war with US (Bradsher & Swanson, 2019). This has been accelerated by the high tariffs imposed on the Chinese manufacturers, increasing the production costs and consequently Chinese goods have become more expensive than before. This discourages other nations from importing goods from the Chinese companies.
The America’s both foreign and domestic investors seem to support the US President, Donald Trump, on his decision to hike the tariffs (Swanson & Bradsher, 2019). This is because they believe that by Trump increasing the tariffs would be advantageous to them as they notice that the US markets tend to open lower when the tariffs are hiked.
China retaliates to Trump’s rise in tariffs through levying high tax on the US citizens working in China (Swanson & Bradsher, 2019). This has greatly threatened the jobs of the US citizens working in China.
The Opportunities for UAE Regarding the Trade War between US and China
While the US-China trade war is threatening the world’s economic growth, UAE may take the advantage of the war and invest in two main opportunities availed by the US-China trade wrangle. These opportunities include:
UAE should subsidize her companies and empower them to produce goods cheaply and supply them to the nations China and US has been selling similar goods to. This is possible especially at this time when the US and Chinese goods are expensive following their overwhelming trade war.
UAE should take the advantage of the trade war between US and China and establish job market for her citizens in China. Getting job in China is now easier following the American workers who a flying from China due to high tax imposed on them by the Chinese government.
Challenges that UAE is facing in Line With the US-China Economic Disputes
Like any other nation, UAE relies greatly on both US and China for her economic growth. Therefore, any economic misfortunate engulfing any of the two nations has devastating reputations on UAE as well. Thus, the current US-China economic dispute has three main challenges on UAE.
Stagnating UAE economic growth. The action taken by US to hike trade tariffs extends its economic challenges to UAE since UAE largely depends on Chinese products which are recently becoming more and more expensive. Besides, the high tariffs imposed on China by US are discouraging UAE citizens from investing in China, thus further diminishing the UAE economic growth.
UAE business breakdown. Over the years, most UAE business enterprises have largely relied on cheaply imported goods from China. However, with the hiking tariffs imposed by US on the Chinese manufacturers, this translates to rise in cost of the Chinese imported goods to UAE, thus threatening possible closure of many UAE business organizations that rely on Chinese imported goods.
Decline in UAE job opportunities for her citizens. The decline in job opportunities for UAE citizens is attributed to the numerous closures of both Chinese and UAE industries that rely on the cheaply Chinese-produced goods. Thus, UAE citizens working in such industries end up remaining jobless following the closure of the industries; leading to not only decline in UAE economy, but also poor living standards of her citizens.
Implications That the US-China Trade War Has On the UAE Economy, and the UAE-US Relations and UAE-China Relations
The ongoing US-China trade war has various negative implications on the well-being of UAE. These implications are as follows:
UAE may experience high rates of economic crackdown. Escalation of the tariffs in China as imposed by US may lead the Chinese UAE-based investors find themselves caught on crossfire. Besides, importation of the goods from China to UAE may become difficult; and the overall effect is decline in the economy of UAE.
Deterioration of the UAE-US relations. The ongoing US-China economic dispute may trigger US in opting to force all China trade partners abandon their trading systems with China. UAE being one of the China trade partners may find it difficult to avert her partnership with China leading to poor relationship between US and UAE.
Endangered UAE-China relations. In the event when UAE concedes to US demand for UAE, being one of the trade partners of China, to abandon her trade partnership with China in order to force China to sign her trade deal with US, the UAE-China relations hangs on a loose balance. China is well-known for her stern stand against the US humiliation and would deal ruthlessly with any nation backing up US in the trade war.
Conclusion
The current US-China economic dispute has adverse effects to both the two nations and the neighboring nations such as UAE. US and China are developed nations and their competition for superiority is greatly threatening the economy of UAE; which greatly relies on both US and China for her economic growth. UAE therefore has the obligation to device means of ending the US-China trade war in order to avoid severe consequences that UAE may face, such as her economic breakdown and ruined relation in either one or both the US and China.
References
Bradsher, K., & Swanson, A. (2019). Trump’s Trade War Threat Poses Problems for China and Investors.
Swanson, A., & Bradsher, K. (2019). Trump Advisers Accuse China of Reneging on Trade Commitments.
World Markets Tumble amid US-China Trade Tensions (2019).
