What If China and America Stopped Trading


What If America & China Stopped Trading? America and China may have a slightly tense
history, but the pair are two of the biggest trading partners in the world. How much do they really need each other? Hello and welcome back to Life’s Biggest
Questions, I am Rebecca Felgate and today I am asking What if the worlds two biggest
economies, America and China Stopped trading? Economics are hard to wrap your head around,
so I am going to try and keep this video simple. Currently the Unites States has the biggest
economy in the world, with a Gross Domestic of 18.57 trillion, whereas China is a close
second at 11.2 trillion. Economics experts predict that China will
be on par with the states by the year 2022, after which it will begin to overtake the
States as the biggest economy in the world. Both the Chinese and American Governments
benefit from trading with one another, yet both charge high Tariffs. United States President, Donald Trump, made
trade with China a key part of his campaign. Despite outsourcing production of his clothing
collection to China, Trump focused on downplaying internationally made goods, instead promoting
US made goods, which is all very well in theory. The past 40 years have been big for China. The country has lifted itself from poverty
to reasonable affluence by changing its previously closed economy that focused on agriculture
to a partially open economy, focused on manufacturing and exporting. Along with that change, the mood in the country
has changed; Chinese people want American Products. If they stopped trading, they’d lose Apple.,
Starbucks, Tiffany, General Motors, Ford, Nike , Microsoft, Intel, Coca Cola, Mcdonalds
and Yum!, owners of KFC. These American companies make a lot of money
in China and their businesses would suffer. In fact, without American exports in China,
the US would be worse off to the tune of 250 billion dollars. On the flip side, Chinese brands aren’t
as well known in the USA but America is buying a lot of Chinese products in the form of technological
parts, appliances and apparel, with companies outsourcing manufacturing to China. In 2016, China was the Unites States largest
supplier of goods imports, to the tune of $462.8 Billion dollars. In terms of the figures, we can see that China
sells the US more than the US Sells to China. In a trade war, or total trade embargo countries
with highest surplus get hit hardest. A lack of trade between the two countries
would have a hugely damaging impact on both countries, but in the short term, no doubt
China would suffer the most. That being said, unlike 40 years ago, China
now has the technology to make competing products on a bigger scale than the US. Some are calling Huawei the next apple, and
the telecoms company has grown 125% in the past 10 years. American companies would suffer, as would
American consumers. The American tech industry is reliant in china,
with Capital Economics saying that China produces three quarters of mobile phones, and 93 percent
of all laptops and tablets. Companies that rely heavily on Chinese imports
include Apple, Microsoft and Walmart. Without cheap labour creating cheap parts,
products from these retailers would become much more expensive for consumers, lowering
the standard of living in the States, at least for the short term, until the States found
a new trading partner or found a way to fill the void with products manufactured in the
US, although American Labour will still drive prices higher. Some think an end to trade with China would
mean that more jobs are created in the US, which could be the case, but not in the short
term. The economic decline suffered by the states
at the lack of trade with China would likely put people out of work in China dependent,
or run businesses. On top of that, low skill manufacturing jobs
are unlikely to ever make a return to America because the cost is too great. Some factory jobs have already been replaced
by machines, and the rest would likely be outsourced to a second or third world country. On the flip side though, higher skilled technical
jobs may return. Aside from the economic decline on both sides,
a lack of trade with America could greatly shake up Chinese politics. Right now, Chinese economic growth is one
of the reasons the people still support a communist government, however if the country
were to fall into economic decline, there could be political upheaval. Politics and economics are tricky topics to
cover in a short space of time, with both being complicated issues. Ultimately, both China and America would lose
a lot of money if they stopped trading with one another, with prices of consumer products
rising to unreasonable levels for United States Citizens. In China, the immediate economic suffering
would be worse, and it could have far reaching political consequences. In the long run, though, China is more readily
poised for recovery than the United States. All in all, though, a trade embargo at this
point in time would be pointless and damaging for both nations. That’s all we have in today’s episode
of Life’s Biggest Questions, If you guys have any further thoughts on the topic, let
me know in the comments box below. For now, I am Rebecca Felgate, be sure to
stay curious, stay alert and never ever stop questioning. Still watching? Why not check out our Biggest What If videos
Playlist and our Biggest Country Questions Playlist….hours of informative fun!

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