The Impact of The United States-China Trade War on The Rest of World Economy

Abstract

This study discusses the impact of the trade war between China and the United States due to the heating up of relations between the two countries and its impact on the Rest of the World (ROW), which will be seen based on economic performance through GDP, import exports, and employment. Using GTAP software by performing two simulations, the results of simulation 1 value of Real GDP of Rest of World decreased. The highest labor absorption was in the TextWapp sector, with the highest exports in the LightMnfc sector, in simulation 2 the value of Real GDP of Rest of the World increased, absorption the highest workforce in the TransComm sector, with the highest exports in the TransComm sector. The trade war between the United States and China affects the world economy globally, as evidenced by changes in the increase and decrease in GDP, employment and commodity exports in the rest of the world.

Keywords: trade war, economy impact, GTAP analysis, rest of world, policy

DOI: 10.7176/JESD/12-12-12

Publication date:June 30^th 2021