The Study Of Trade Frictions Between China And US

Since 1979, with the deepening of China’s open and reform, foreign trade has showed a rapid growth trend. The Sino-US bilateral trade also flourished, but with trade conflict problems representing increasing number, expanding amount and more variable forms.This paper firstly reviews literature. It analyzes the causes for Sino-US trade frictions from trade protection theory, macro and micro economic theory and political economics. Market failure, short-term price rigidity and trade imbalance are economic factors, plus voters’interest dispersion, interest groups’lobby and dominant policy choice are political factors. They will urge the government to take trade protection. The influencial factors of anti-dumping and countervailing involve economic and political aspects and economists hold different views upon their social effects. The neoclassical school thinks that anti-dumping declines social overall revenue while the strategic school thinks it can protect domestic import competition industry. In addition, researchers hold controversial opinions on whether countervailing can significantly reduce the unreasonable export subsidies.Secondly, the paper discusses the development of Sino-US trade in different president terms. It points out the Sino-US political relations and economic policy changes can directly affect the frequency of trade frictions, and they tend to be incandescent, more discriminatory and offensive and gradually extend to the system level. It also analyzes China and the US respectively and uses data to confirm negative effects of frequent trade frictions on bilateral trade. In addition, Sino-US import and export trade data in manufacturing show that the United States is not in accordance with the classical trade theory and does not export a large number of capital and technology intensive products. Combined with conclusions from Gomory and Baumol’s model that Sino-US trade is in mutually beneficial zone, it promotes further discussion on the irrationality of Sino US trade friction. Econometric analysis shows that the two countries’GDP growth rate, US unemployment rate and the exchange rate have significant impact on the anti-dumping cases while switching office parties and WTO system do not have.Finally, it studies the iron and steel industry to explore the reason for combined anti-dumping and countervailing measure. The paper confirms trade investigation effect, trade suppression effect and trade diversion effect through the oil well pipe case with lateral and longitudinal dynamic data.At the end of this paper, it provides a series of policy recommendation aimed at the traditional trade friction and carbon tariff which has not been levied.