The Application of the FTWSWE-Simulator on the U.S.-China Trade War

Abstract

This paper presents a simulator to observe how a trade war can affect the economic performance of both countries or regions. This new simulator is entitled “The Foreign Trade War Smash Wave Effect Simulator (FTWSWE-Simulator).” The FTWSWE-Simulator works under the concept of the inter-spaces leaking coordinate system. The main objective of the FTWSE-Simulator is trying to simulate a large trade war between U.S. and China under different tariff rates (1%, 5%, 25%, 50%, and 100%) from U.S. to China and vice versa to evaluate its final impact on its ratio of exports, ratio of imports, production capacity, unemployment levels, income desgrowth, inflation levels, and poverty levels between China and U.S. from year 2020 to year 2025.

Keywords: China, U.S., Policy Modeling, Tariff, International Economics

JEL Classification: F1, F10, F13