The China–US Trade War and Future Economic Relations

Abstract

The immediate and the real impacts of the China–US trade war on the Chinese and US economies are assessed. It is shown that while the impacts are negative and significant, they are smaller in both absolute terms and relative to GDP for the US than for China, but manageable by both economies. However, the economic and technological competition between the two economies is likely to continue even after the tariff war is settled. The Chinese economy will continue to grow at a faster real rate than the US economy and will likely surpass the US economy in terms of aggregate real GDP in the early 2030s. It will take longer for the overall Chinese technological level to catch up to that of the US. In terms of real GDP per capita, it will likely be the end of the twenty-first century before China catches up with the US.