In the context of world economy globalization, competition between producers exceeds the established framework. In particular, the situation is exacerbated between the biggest countries. The world's leading economy, the United States, has lost some of its position in recent decades due to China's intensification in many markets. The deepening of negative trends such as negative trade balance, the loss of export markets, and the growing dependence on China stimulated the introduction of protectionist measures against China and beginning of a trade war between these countries. Such measures affect not only the participating countries, but also have unpredictable consequences for the rest of the globalized world. The article provides a retrospective analysis of the trade war between the United States and China, examines the opinions and forecasts of experts on the consequences of such a confrontation. Based on the analysis of theoretical approaches, it is appropriate to distinguish the following assumptions: (1) global trade wars have negative consequences for all parties to the conflict, as they generally reduce the welfare effect; (2) within the framework of bilateral trade is possible both scenarios, however, are usually lost both parties; (3) even though the big economy benefits from trade wars – world welfare deteriorates. Least squares regression analysis (SLS) was used to estimate the main functional dependences. Based on four statistical models, the effects of the trade war on the world economy as a whole (1), foreign trade partners of China and the United States (2) and on countries themselves (3 and 4) are estimated. It has been established that trade disputes between the United States and China affect the parties of the conflict and their foreign trade partners to a greater extent than economic growth on a global scale. This situation creates the basis for the negative expectations, which have more impact than the phenomenon of trade war itself. The current and further consequences of the ongoing conflict are seen not only as a threat but also as an opportunity for Ukraine’s economy. Consequently, the priority should be on finding new export markets, further diversification of foreign trade in geographical and commodity dimensions, quality industrial policy that will involve innovative technologies, development of the domestic market, which can serve as a shock absorber from foreign market fluctuations.
Why Tariff and Trade War?
