CA 2 ASSIGNMENT

Name: REYLEND STEFFIN YANATA

Student ID:10214556
Course: Diploma in International Business
Question 1(i)
Introduction
In my stand, I believe the US & China trade war will bring a great impact on the global economy.
There’s one fundamental IR theory that will explain the important aspect for US-China trade war.
Definition:
Realist is an IR theory emphasizing the reality of the international politics. They believed that
international relation is best understood in terms of power (dominance).
Current trade war US CHINA
On July 2018, the Trump administration had declared trade war with China. The US noticed China as
a pose threat to their view and they are worried that China will be the dominant on the global system.
Hence, US had embarked the first sanction on Chinese goods and services by 25%. As China
responded with the same manner, Trump had been announced to sanction China for intellectual
property theft of US business. Whereas China had been accused US for abusing them as there’s rules
that set out by WTO.
Body
Firstly, Realist viewed that China could surpass or threaten the most powerful states (US) in the status
hierarchy (Power Transition Theory). Hence US will declared “trade-war”. “Balancing of power”
comes to play where to avoid the being dominated by a rising of power (China). Similarly, US made
alliances with another state to avoid China being too powerful (Counterbalancing). There’s an
evidence that “China thought it could forge a trade alliance with the EU against the U.S. Now, it
appears the EU wants to team up with the U.S. to renegotiate trade.” 1 It gives more accessible
advantage for the US firms to expand their export in EU and less dependence on China.
Secondly, US have the rights to imposed sanctions consecutively to China in any ways since there is
no central authority in the International System (anarchy). Thus, states must rely on themselves and
start sustaining their dominance of power. The inevitable discombobulation causes US to feel
threatened, hence resulting in a large clash that had impact globally, Thucydides trap occur. The US
had label China “a currency manipulator”2. This makes the Chinese goods relative cheaper.
Thirdly, Realist view that the US wants to pursue relative gain by engaging in trade war and imposing
sanctions. China will find difficulty in exporting thus reshoring occurs. “Trump argued that unilateral
tariffs would shrink the U.S. trade deficit with China and cause companies to bring manufacturing
jobs back to the United States.”3 On contrary, the US still relied heavily on China allocating cheaper
spare part and low cost goods. Thus, taxes started increasing on China’s goods and will slowly
diminished job growth in the US. This shows that US also had experience losses in trade war.
Critical Issues
Realist is applicable to the US-China trade war since both states had ever imposed tariffs, embargoed
certain product like aluminium and steel. As the matter of fact, they observed that power was derived
from material elements (GDP). US had dominated for decades and they felt threatened when China
had been doing unfair trade practices. Realist noticed how the US are pursuing their self interest
likewise, they are banning these Chinese firms (Huawei) because it can pose threat to the American
National Security, Protectionism occurs. Mercantilism sees that both parties are protected by its own
interest at the expense of others. It has implication of state’s military power as rise in power in china
need to be stop before colonising other states hence US need to act (Mearsheimer)4.
Realism is not applicable in the US-CHINA trade war because they tried to made agreement on both
sides rather than lengthened the trade war (war is irrational in liberal perspective). They joined WTO
(International Regime) for a long time to manifest reciprocity between states and being economic
interdependence. Both states should join international organisation and have collective norms that can
mutually benefit from economic exchanges without perceiving to war.
In conclusion, I believed that Classical Realism is much more applicable than Classical Liberalism in
US-China trade war. The purpose of international regime like WTO was to act diplomacy with other
state and maintain relationship. However, states will act accordingly to their self-interest. US had been
mentioned as China doing “unfair trade practice” and sanctioning repeatedly. As WTO stated that US
violated international trade rules which US still insist. US are doing act of self-defence against unfair
trade practices (Protectionism). China corresponded in the same way (deterrence). It proves that both
states want dominance and have high egoistic to one another than reciprocity. This case study is more
suitable for realist point of view than liberalism.
Question (ii)
Marxist IR theory is an approach that focusing on the economic system based on inequality and
exploitation from the sovereign states.
Body
Marxist IR theory suggest that capital globalization causes instability in the international system
(inevitable). The world is segregate into two parts in the global system (global south and global
north). They stratified base in different levels of wealth. US is part of global north while China belong
to the global south. World system theory believe in Marxism social class, but they separate into 3
classes: Core (White collar worker and exploit non-core state) Semi-periphery (Mediating
economic,political,social activites association with core and Periphery).Periphery: (Supplying
resources and labour force.)
Marxist IR theory sees US is a core state whilst China is semi-periphery. US had military power,
innovating technology, influencing non-core state. China had big market and huge mass of land for
production. Firstly, US-China had conflict on technology competition. Technology in china has
growth rapidly that lead US to feel threaten of the advancement of “5G technology”5 thus they
deemed to banned it. China had planned it 4 years ago so called “Made in China 2025”6 to compete
US in terms of technology, biotech, robotics, and aerospace. China challenges their achieve status
from semi-periphery to core. Hence, implementing tariffs could controlled China’s export and reduce
their progress of achieving their goal. This proves that Core state (US) oppress Semi-peripheral State
(China).
Marxist IR theory sees the US government are influencing China to sell their famous app called “Tik-
Tok”. From all over the “bid”7, Oracle had won the bid and take control of Tik-Tok. Oracle had been
donating to the trump campaign in 2020. Since then, Oracle have an advantage of boosting business
and increase lump-sum payment. China had no choice but follows and loss huge market. As US will
benefit the firms more than the consumer because they can do cartel with big tech company prone to
cheating (Anti-trust).
In conclusions, Marxist IR theory sees that US and China had different goals. Core state will
influence and innovate new ideas that made them exploited continuously (Inevitable). Whilst the
semi-periphery will tries challenging the core state and removed their achieved status as (Semi-
periphery to Core). As a result, there is a hierarchy that prevent states to mobilize.
Reference
(1) : https://www.investors.com/politics/editorials/u-s-china-trade-war-costs/
(2) : https://www.cnbc.com/2019/08/05/trump-accuses-china-of-currency-manipulation-as-yuan-
drops-to-new-low.html
(3) : https://www.brookings.edu/blog/order-from-chaos/2020/08/07/more-pain-than-gain-how-the-us-
china-trade-war-hurt-america/

(4): https://www.youtube.com/watch?v=79gCqjl6ihQ

(5): https://thediplomat.com/2020/08/the-global-war-for-5g-heats-up/
(6) : https://www.ispionline.it/it/pubblicazione/us-china-competition-trade-wars-technological-
supremacy-21114
(7): https://www.barrons.com/articles/oracle-wins-tiktok-bid-beating-out-microsoft-and-walmart-
what-to-know-51600043161