Globalization plays a pivotal role in shaping the global economy. Trade is one of the most effective tools to bring revolutionary changes in deteriorating financial systems. But in today’s world, it is used as a weapon for the destruction of emerging economies. Trade has a past, a great past which either makes a nation great or divide. On turning the pages of history, we will encounter with examples that prove how imperialistic nations use it as a weapon? The significance of a robust economy cannot be overlooked. The economy of a country helps to determine its status in the global village. This is the reason, G20 came into existence.G20 summit held at Osaka where leaders discussed the pertinent issues of the global economy. This year the salient topic which attracts the attention of the leader was the US and China trade war. Japan and Germany are in dire straits due to the escalation of tariffs between the US and China. Therefore, the trade war is not disrupting US and China economies, but also influencing the global economy in a negative manner and gave a serious hit to globalization.
East India Company, a big giant that changes the dynamics of Asia in terms of politics and geography. It divided the subcontinent and created tensions in China in the name of trade. Between 1839 to 1842, British imported tea and Chinese silk to fulfill their luxurious needs. Therefore, it created a trade deficit for the British. Then, in order to save silver for themselves; they began to give opium instead of silver which resulted in massive Chinese addiction to opium. Therefore, Emperor of the Qing Dynasty decided to close the door of trade with the outside world. This ignited Britain and they initiated a war named Opium war in the name of free trade with China. America wants to follow the same footsteps of Britain to shaken China? It is 21 Century, where China is among the most technologically advanced country, the largest army, and with good diplomacy policies. It wouldn’t be easy for America to halt the progress of China.
Trump’s slogan “Make America Great” bring him at a verge to impose high tariffs on China imports and Chinese retailed back with high tariff rates. In this tug of war, only two countries are not suffering, but in this globalized world, where every country is connected in a chain. This trade war is not only disrupting a whole chain but affecting the global economy. For instance, Japan is one of those countries whose economic growth slumming due to the US China trade war. It is famous for its automobile parts, which are exported to China where they assembled and exported to America. But with surging export taxes, the orders from China to Japan delineated. Germany’s economy shrinks significantly due to a trade war.
The aftermath of this trade can be observed explicitly. The loss or gain in this war can be observed after a period. But, one thing is clear, the consumers are the sufferer at the end of the day because increase in tariffs will proliferate the inflation which in return affects the purchasing power of people. Secondly, it has substantially affected the economy of China. Factories have started to shift from China to Bangladesh, Vietnam, Korea, etc. Vietnam and India emerged as “the two most favored destinations for new production sites” among companies in the tech supply chain across China and Taiwan. According to General statistic office Vietnam’s newly registered foreign direct investment (FDI) capital from China increased by 4.6 times this year… India’s FDI from China increase to 137 percent in 2018 from the previous year.
George Santayana said, “Those who do not remember the past are doomed to repeat it”. The Chinese nation understands and knows it better. This is the reason they are utilizing the power of nationalism and history to survive this arduous time. But one thing should be remembered this is a technology era. Those who utilized and get expert in technology will win every war in every field. China learned from history how the British have exploited its terrorism and rule Hong Kong? It is the biggest economy with Road and Belt visionary project.
To conclude, trade may use a weapon for economic destruction, but a nation with technology and spirit of patriotism is difficult to defeat. The society which is labeled as authoritarian is better in playing and silently working to strengthen itself.