Analyzing intra-industry trade between United States and China before and after United States-China trade war / Nooratikah Abdul Rahim

Economic ties between the United States and China had grown significantly since the late 1970s when China began reforming its economy. Today China is America's largest trading partner for commodities, its third-largest export sector, and its most abundant source of imports. The United States-China economic partnership is having problems relating to the number of imports and exports between both countries. Throughout 2018, President Donald Trump started to introduce tariffs and other barriers to China's trade to force it to change what the U.S. sees as ‘unfair trade’. This study analyzes the trade pattern between the U.S. and China before and after the United States-China trade war. Using the Trade Box Analysis method, intra-industry trade between the U.S. and China were analyzed. The results showed that the United States was the net importer in 2014, but in 2018 it changed to be a net exporter. Nonetheless, the United States has returned to be a net importer country in the year 2019 after the United States and China trade war begun. Anyway, the resources relating to the trades between the two countries do not show much change during the analyzed period. There are indications that the adjustment pressure which causes changes in the reallocation of resources might exist in the long run.