Impact of US Presidential Elections on US/China relations for business
USA presidential election is a salient feature in the plummeting of the Chinese and American relationships; therefore, with each election, the rift between the two republics widens and creates more glitches for the already fragile rapport. The two countries have cultivated a common platform riddled with competition and negativity; not only do the two countries try to outsmart each other but also plan to plunder each other’s economic power. Trade between the two countries is a crucial feature in the USA political arena. It garners more followers to an aspirant who vows to restore the state’s supremacy in the international market. Therefore, the two presidential aspirants Joe Biden and Donald Trump, promise to be tougher on China if elected to the white house. Notwithstanding the existing tension and losses being incurred, the United States continues to press harder and relentlessly. (Friedberg, 2005)
Global marketing of goods is at stake as Donald Trump’s political agendas revolve around the USA’s total dissociating from China. He has further directed that Chinese companies in the USA be delisted even though USA’s companies continue to enjoy their presence in Asia. Global trade will face a negative outcome as many companies will be hurt, and this is because many businesses are designed to make profits from globalization. Although other companies will reap bountifully, the overall outcome will weaken the already established global trade. Therefore, this has already forced investors to reassess the international market before making any significant business decisions. Although the foreign exchange is splintering, Chinese president Xi Jinping pushes more companies to expand overseas and focus more on globalization as he deems that it the best thing to do. (Duran & Ersin, 2020).
Due to the proposed trade strategies, Barack Obama addressed the need to impose strict rules on China’s goods and even shift manufacturing engines to the West. With China as the most significant manufacturing country, goods have become cheaper; therefore, moving the manufacture of goods to the West means that there will be a harsh reality. The costs of goods will spiral as the companies will possess a status quo enough to make them hike prices to accord superiority to their companies over the Chinese companies. Although moving this supply chain away from China will take years, it is critical to note that inflation will slowly encroach the world economies. Finally, it is crucial to know that the countries caught in between the tussle will be subject to detrimental effects due to the shift. As America tries to achieve its trade strategies, it has failed to reevaluate the process’s outcome and the dire consequences that will occur in many nations in the wake of their accomplishments. (Lampton, 2001)
For example, Chinese products, such as Huawei and its 5G network, are already facing a total ban from the USA as postulated by President Trump’s election manifestos. Furthermore, other countries like the UK follow the lead of the Americans in rejecting the product, which has proven to be harmful to the marketing strategies available. The USA’s republic has further denied visas to Chinese nationalities, therefore making the situation even messier. Without a doubt, the move taken by Donald Trump to ban Chinese products is a significant setback to the Huawei’s company that boasted before of assured market in the country. The profits that had been pictured quickly diminished, creating a considerable hindrance to the blooming company; therefore, it is clear that elections majorly fuel the two countries’ tussle. In the long run, there is a significant problem in the marketing of goods. (Lieberthal & Jisi 2012)
With the continuing trade wars, American businesses like Apple could be further helpless because they depend on Chinese companies’ returns and supply chains. The Chinese are not retaliating because they consider their companies lobbyists. 11 Chinese companies were recently denied to buy American technology; therefore, it is evident that businesses are facing challenging times due to political turmoil in the USA. Additionally, China’s dominance in the South China sea as of trade is likely to face a more significant rival as the USA. Other countries are proving to be counteractive and ready to compete for the available market in other Asian countries previously served by China. (Duran & Ersin 2020)
More markets and supply chains are expected to shrink as the USA continues to delist multinational companies with Chinese origin. The advantages of globalization that encompass vast market development are soon going to wane and become obsolete. Moreover, companies must be subject to auditing and prove that a foreign government is not owning them for them to be enlisted in their respective country. Although there are many undesirable results from this move, the actions in motion remain a policy to president Trump.
An increase in import tariffs of up to 45% on China’s assets, as proposed by President Trump, is likely to deny a ready market to Chinese products. Therefore, it is quite evident that the result of the disparity is expected to cripple businesses and destroy the existing market as many countries will be caught in between the menace of the two countries.
References
Duran, S., & Ersin, İ. (2020). The Effects of Trade Wars Between US and China on the Financial Performances of the Companies. In Strategic Priorities in Competitive Environments (pp. 323-339). Springer, Cham.
Friedberg, A. L. (2005). The future of US-China relations: Is conflict inevitable?. International security, 30(2), 7-45.
Oxford Analytica. US-China conflict over Huawei clouds 5G outlook. Emerald Expert Briefings, (oxan-db).
Lampton, D. M. (2001). Same bed, different dreams: Managing US-China relations, 1989-2000. Univ of California Press.
Lieberthal, K., & Jisi, W. (2012). Addressing US-China strategic distrust (Vol. 4). Washington, DC: Brookings.