U.S-China at the Brink of Trade-War II?

Donald Trump had imposed tariffs over nearly USD 360 billion worth Chinese goods for which the Trump administration, as well as Beijing, had entered phase one of the trade agreement in January 2020 anticipated for easing the tension. However, the progress was derailed as soon as the blame game over the Covid-19 crisis following the rising number of contagions across the globe, with the United States recording the maximum number of official deaths of any other country yet.

Moreover, direct investment by China in the United States has fallen to its lowermost level in 20 years since the Great Recession. The fall down was instigated even prior to the coronavirus pandemic global shutdown happened. Thus this decline of China’s direct investment in the United States revealed the again escalating tensions among the two largest economies of the world followed by the restrictions by the Chinese government over overseas investment.

In addition, Trump’s intimidation in terms of reigniting the US-China trade war over the COVID-19 crisis has triggered another major sell-off within the global financial markets. The

Also, experts notified the prediction of the trade war II being renewed since the economies are heading for the deep recession alike the Great Depression of the 1930s. Furthermore, this may perhaps inflict further damage in terms of jobs and growth.

In recent times, President Donald Trump warns of breaking the phase one deal in case Beijing refuses to adhere with terms and conditions including the purchase of around US$200 billion US goods.

A recent report is further indicative of dipping China's direct investment in the US from USD 5.4 billion in 2018 to nearly USD 5 billion, the fall is around 5.9 percent. This is perhaps the drop ever since the 2008 recession.

Additionally, direct investment basically must involve acquisitions, mergers, as well as investments, stuffs such as offices & factories, and not the financial investments such as buying stocks and bonds.

The US-China trade war that had started years ago has already done a lot of damage to the economies when the IMF also had to cut its growth forecast. And now with another phase of the trade war that is expected to be started will further add to the COVID-19 damage.