How Will the Current Trade War Impact Our Economy?
What impact will the trade war have on our United States economy? Let’s explore this common query today.
There’s been a lot of talk recently about the trade war between the U.S. and China. With both countries having placed new tariffs on one another, many consumers in our marketplace are growing anxious. Today I’d like to dispel some of this tension by sharing some important points to keep in mind.
In 1980, China was an impoverished nation. Then, they adopted the rules and tools of capitalism and their economy began to flourish.
Unfortunately, international tensions eventually arose in the wake of this development, as Chinese companies began infringing upon other countries’ intellectual property, and the current trade war eventually ensued.
While the billions of dollars in tariffs that will arise out of these circumstances are not ideal, it’s important to realize that, in comparison to the trillions of dollars that could be lost in intellectual property theft, this trade war is not likely to be indicative of a coming recession.
Last year, the U.S. exported $180 billion in goods and services to China. This constitutes 0.9% of our country’s total GDP. China, on the other hand, exported $559 billion in goods and services to the U.S. This represents 4.6% of China’s GDP.
In other words, we have tremendous economic leverage over China. Therefore, even in the event of an extended trade war (which is unlikely), these tariffs are not worth losing sleep over.
If you have any other questions or would like more information, feel free to give my team or me a call or send us an email. We look forward to hearing from you soon.
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