• <div class="header-image" style="background-image: url(/live/image/gid/4/3256_shutterstock_1302963724.rev.1575383343.jpg);" data-share-image="/live/image/gid/4/3256_shutterstock_1302963724.jpg"/><div class="header-background-color"/>

The effects of the US-China trade war on US Exports

January 27, 2020

It has been nearly eighteen months since the US-China Trade War began in July 2018, largely due to two main factors: the United States’ perception that trade between the United States and China is unequal, and that China has been participating in unfair intellectual property practices. As the trade war persists, United States exports have suffered, affecting both businesses and consumers, albeit in different ways.

Beginning in 2009, President Obama’s administration brought eleven trade enforcement actions against China as the United States struggled to control Chinese commodities dumping and economic espionage [1, 2, 3, 4]. A comparison of President Obama’s and President Trump’s press releases indicate that President Trump shares some of President Obama’s views, as President Trump often claims that the United States’ trade relationship with China is not reciprocal [5]. President Trump’s claim that China participates in unfair intellectual property practices is the most prominent issue that led to the trade war. According to the U.S. Trade Representative Peter Navarro, the annual loss to the United States, as a result of intellectual property theft, amounts to between $225 billion and $600 billion, a noticeable loss to the US economy [6].

The trade war began long before President Trump began implementing tariffs affecting China, under the pretext of a trade war, in July 2018. In January 2018, the US implemented import tariffs on washing machines and solar panels from all around the world [7]. Only three months later, President Donald Trump implemented new 25% tariffs on $50 billion of Chinese imports. The White House instituted new 25% duties on steel imports and 10% levies on aluminium imports from anywhere in the world [8]. The same month, China imposed retaliatory tariffs that affected over 100 American products worth approximately $50 billion [9].

The Trade War has an immense negative impact on American exports because tariffs increase the prices for specific exported goods, making them undesirable or difficult to sell in foreign nations [10]. As prices for American goods increase, companies’ profits begin to decrease. The conflict has continued to escalate since April 2018, as negotiations between the two nations have been unsuccessful.

General Effects on Exports

United States exports are steadily decreasing as a result of the US-China Trade War. Soybean exports decreased by $1.035 billion from August 2019 to September 2019, while automotive vehicles, parts, and engine exports declined by about $1 billion from August to September 2019 [11]. From August to September 2019, US exports of goods decreased by $1.8 billion, from $207.8 billion to $206.0 billion [12]. According to the Institute for Supply Management, American exports are on the decline, as the index of new export orders “plunged 4.8 points to the lowest level since April 2009” [13].

The American agricultural industry has slowed down immensely since the beginning of the Trade War, most notably due to the $10.4 billion decrease in agricultural product demand from China from 2017 to 2018 [14]. The nation’s 300,000 soybean farmers have been hit the hardest in the agricultural industry [15]. From 2014 to 2018, the top five producers of soybeans were Illinois, Iowa, Minnesota, Indiana, and Nebraska, [16].

Effects on Businesses

The decline in US exports has negatively affected businesses across the United States. According to a survey conducted by online business-for-sale marketplace, BizBuySell, Chinese tariffs have “increased the cost of doing business for more than one third… of small businesses across the U.S.” Trend Nation, a Las Vegas firm that manufactures thousands of products in China, has seen its tariff bill double from $800,000 to $1.6 million as a result of the trade war [17]. Recent tariffs caused Spartan Armor Systems, an Arizona-based body armor company, to raise its prices by ten percent overnight [18]. The US-China Trade War has resulted in decreased profits for companies in a diverse array of industries across the United States.

For businesses across the United States, options are limited. Brooklyn Bicycle, a handmade bicycle company based in New York City, is running out of options. Ryan Zagata, the firm’s owner, could raise the price of his bicycles by $50, which he believes is risky in such a competitive market. Zagata could also absorb the cost of the tariffs, source components from other nations, or adopt a new pricing strategy that allows the firm to incrementally increase prices and absorb a smaller percentage of the fare. However, each option would incur significant costs to the company and its customers, which Zagata is hoping to avoid [19]. Brooklyn Bicycle’s problems are not unique; companies across the United States will continue to struggle as the US-China Trade War progresses.

Companies with supply chains heavily based in China are beginning to move production out of the country as the trade war continues. While firms were, according to Ben Casselman, “initially reluctant to abandon long standing supplier relationships in China… choosing instead to absorb the tariffs or find ways to share the costs with suppliers and customers,” major corporations are now looking for alternatives [20]. In a recent survey of 200 corporate executives conducted by Bain & Company, 42% of the firms expect to source materials from a different region than China in the next year, and 25% indicated that they are redirecting investments out of China [21]. Small businesses are often more fragile than large businesses, especially during financial crises or turmoil, due to inexperience [22]. ControlTek, a small electronics manufacturing company based in Vancouver, Washington, “is shifting supply chains out of China where possible, and redesigning products to avoid Chinese components” to mitigate the effects of the trade war [23]. Such changes represent drastic changes in the way American firms view their revenue and supply chain.

Effects on Consumers

Consumers are negatively impacted by an increase in price levels, as indicated by the Consumer Price Index (CPI), which measures price levels in the economy. This growth indicates an increase in consumer price levels [25]. Kathy Bostjancic, Chief U.S. Financial Economist for Oxford Economics, confirms the rise in US prices, estimating that tariffs could cost the average American household an additional $650 per year [26]. This increased cost disproportionately harms low-income households and families living paycheck-to-paycheck, as such households will struggle to afford such a substantial cost of living increase.

While prices increase, companies are beginning to pass on the losses incurred from tariffs onto consumers. ControlTek is rewriting contracts to make it easier to impose the cost of tariffs from the US-China Trade War on its customers [27]. As the trade war looms on, larger corporations will begin to follow suit, and price increases for consumers will begin to pile up.

Since the trade war began, the United States stock market has become more volatile, especially as new tariffs and policies related to the Trade War are announced [28, 29]. According to Investopedia, volatility in the securities market “is often associated with big swings… by more than one percent over a sustained period of time… in either direction.” Volatility is often associated with higher levels of risk [30].

On December 13th, the United States and China solidified the first phase of a trade deal that aims to end the US-China Trade War. The agreement halted substantial tariffs from both nations that were set to begin on December 15th, implemented additional intellectual property regulations, and increased the purchase of American agricultural products [31]. However, critics of the deal claim that the terms of the agreement remain unclear and unsubstantial [32].

For small businesses in the United States, the future remains unclear. While the Trump administration lauds the agreement as an important milestone, it also claims that it will use remaining tariffs, including $250 billion in Chinese goods as leverage in subsequent negotiations [33].

The future remains complicated and confusing for small businesses. Small companies will suffer as the cost of business continues to swell and as negotiators use American supply chains that are heavily reliant on Chinese manufacturers and suppliers as bargaining chips in future negotiations. Negotiators in upcoming talks between the US and China should keep in mind how new policy will affect small companies across the United States.

  [1] According to Investopedia, commodities dumping occurs “when a country or a company exports a product at a price that is lower in the foreign importing market than the price in the exporter’s domestic market”.

  [2] Economic espionage is “the unlawful targeting and theft of critical economic intelligence, such as trade secrets and intellectual property” [4].



  1.   https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2015/january/fact-sheet-obama-administration%E2%80%99s
  2. Ibid.
  3.   https://www.investopedia.com/terms/d/dumping.asp
  4.   https://www.investopedia.com/terms/e/economic-espionage.asp
  5.   https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-confronting-chinas-unfair-trade-policies/
  6.   https://fortune.com/2019/03/01/china-ip-theft/
  7. Ibid.
  8.   https://economics.rabobank.com/globalassets/2018/11-november/sp-tradewar/rabobank2018-trade-war-infographic-en.pdf
  9. Ibid.
  10.   https://ru.reuters.com/article/ousivMolt/idUSKCN1VO1RH
  11.   https://markets.businessinsider.com/news/stocks/trump-us-china-trade-war-timeline-of-everything-thats-happened-2019-8-1028474486#10
  12. Ibid.
  13.   https://www.latimes.com/business/story/2019-09-03/hiltzik-trump-is-killing-us-manufacturing
  14.   https://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
  15.   https://www.bls.gov/news.release/pdf/cpi.pdf p. 2.
  16.   https://soygrowers.com/
  17.   https://www.cnbc.com/2019/10/05/us-china-trade-war-causing-small-biz-to-reinvent-customer-retention.html
  18.   https://www.inc.com/cameron-albert-deitch/trump-tariffs-small-business-us-china-trade-war.html
  19.   https://www.inc.com/magazine/201811/norm-brodsky/trump-tariff-war-china-harm-business.html
  20.   https://www.nytimes.com/2019/05/30/business/economy/trump-tariff-manufacturer.html
  21.   https://www-sciencedirect-com.proxy.library.upenn.edu/science/article/pii/S0883902615000658
  22. Ibid.
  23.   https://www-sciencedirect-com.proxy.library.upenn.edu/science/article/pii/S0883902615000658
  24.   https://www.investopedia.com/terms/c/consumerpriceindex.asp
  25.   https://www.bls.gov/news.release/pdf/cpi.pdf p. 2.
  26. Ibid.
  27.   https://www.washingtonpost.com/business/2019/08/06/us-china-trade-war-drags-heres-what-it-means-you/
  28. Ibid.
  29.   https://www.bloomberg.com/markets/stocks
  30.   https://www.investopedia.com/terms/v/volatility.asp
  31.   https://www.reuters.com/article/us-usa-trade-china-details-factbox/whats-in-the-u-s-china-phase-one-trade-deal-idUSKBN1YH2IL
  32.   https://www.wsj.com/articles/us-china-confirm-reaching-phase-one-trade-deal-11576234325
  33.   Ibid.


  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>