The U.S.-China Trade War During Trump's First Presidency: Economic Consequences for the United States and Changes in Sino-American Relations

This thesis, entitled “The U.S.-China Trade War During Trump’s First Presidency: Economic Consequences for the United States and Changes in Sino-American Relations,” analyzes the major effects of the trade war between the two countries, focusing primarily on events between 2018 and 2020 that contributed to a growing economic rivalry. The first chapter outlines the main theories supporting economic liberalism in contrast to protectionist approaches, examining the debate between supporters of free trade as a driver of global growth and advocates of more restrictive economic policies. It then outlines the fundamental principles of the General Agreement on Tariffs and Trade (GATT) and the structure of the World Trade Organization (WTO) as pillars on which the international trading system is based, and which guarantee fair trade practices among its member countries. Finally, the first chapter focuses on the main instruments of trade policy, including tariffs, explaining how they function and their economic effects. Subsequently, the second chapter introduces an analysis of China’s economic and political development, from the Maoist era to the major transformations undertaken under the leadership of Deng Xiaoping, concluding with the country’s admission to the World Trade Organization in 2001. Concurrently, it examines the fundamental diplomatic negotiations that brought about the normalization of Sino-American relations in the 1970s. The chapter concludes with a discussion of the political approach that emerged in the United States under President Donald Trump during his first term, examining the main theories supporting the America First doctrine and outlining the key foreign and trade policy objectives aimed at revitalizing the American economy. The third chapter introduces the timeline of events that characterized the trade war, reporting the numerous waves of tariffs and the subsequent Chinese retaliation, and then analyzes the conditions established by the Phase One Agreement, which initiated a period of truce in trade relations between the two countries. Finally, an analysis is conducted on the impact of tariff measures on the U.S. economy, with particular attention to the following factors: the incidence of tariffs on costs borne by domestic consumers and importers, changes in the economic welfare, possible trade diversion effects, and costs and benefits for the agricultural and steel sectors. The analysis concludes by assessing the effects on the bilateral trade deficit with China. To conclude, the fourth chapter presents a consideration of the medium-term legacy of the trade war, assessing the evolution of the implemented measures and the trends in the bilateral trade deficit. The study evaluates whether trade tensions have effectively stimulated a process of decoupling between the two economies and how emerging rivalries have exacerbated Sino-American relations. The main objective of this thesis is to understand whether tariff measures and trade tensions have negatively affected the U.S. economy and weakened the economic interdependence between the two nations