Tariff War, Through the Lense of a Network System
Source: https://www.wsj.com/articles/trump-to-lay-out-line-on-china-trade-1537213209
The article “Trump Announces New Tariffs on Chinese Imports” written by Jacob M. Schlesinger and Vivian Salama for the Wall Street Journal discusses President Trump’s administration plan to pressure China into modifying its commercial and trade policies through an imposed 10% tax on $200 billion goods that are imported from China.
The issue discussed represents a tit-for-tat strategy situation since so far the U.S. and China have been countering each others’ trade policies with equivalent retaliation. This is shown in the article when it states, “China’s Commerce Ministry on Tuesday vowed unspecified countermeasures” and how “Beijing previously said it would impose on $60 billion in U.S. goods if the Trump administration went ahead with this latest tariff round.” Therefore, neither is willing to negotiate and results in a competing relationship between the two players.
The article’s topic also reminded me of a network system where countries agree on tariff policies between each other. Thus, creating economical allyship. In a network system this can be represented as a strong, positive tie between two countries. However, in the case of the U.S. and China, they now have a weak, negative tie, where both sides are negatively affected by the trade policies placed upon each other. For the U.S., it can affect many U.S. companies that rely on China’s manufacturing products, which can result in an increase in prices for products sold by those companies. In a larger context this is undesirable for consumers. Meanwhile, China’s economy relies on selling their products to the U.S. and obtaining agricultural imports as well from the U.S., but the tariffs could become a burden on their economy. Even though this tariff war can severe the ties between China and the U.S., China has an advantage of growing its network by developing strong, positive ties with other countries since unlike the U.S., it has the manufacturing resources and lack of labor policies to produce cheap products .