The Effects of Trump Trade Policy on China’s Economic Performance

Abstract

In this paper, we perform different simulations to assess the effect of the Trump administration’s international trade policy on the Chinese and American economies in the next five years. To do so, we develop a new economic simulator, namely the “Foreign Trade War Smash Wave Effect Simulator (FTWSWE-Simulator).” The FTWSWE-Simulator is based on the concept of the inter-spaces leaking coordinate system. We apply the FTWSE-Simulator to simulate a large trade war between U.S. and China under different tariff rates (1%, 5%, 25%, 50%, and 100%) to evaluate the final impact on its ratio of exports, ratio of imports, production capacity, unemployment levels, income desgrowth, inflation levels, and poverty levels in the two countries between 2020 and 2025.