If the Trade War continues, how long will it take for China's economy to collapse?



Assuming the US slaps tariffs on all Chinese imports, as US president Donald Trump has threatened to do. If it continues to run this way, both of them will have to pay a big for it. As the reactions from the financial markets seem worse and which creates the possibility to cut the GDP of the United States by more than 0.9 percent in 2019, while Chinese economic output would be 1.6 percent lower than it otherwise would be, IMF said.

US will impose tariffs on the US $267 billion of Chinese goods-covering nearly all of Chinese imports as well as it's Automotive imports too, which would create risks for many countries which are directly or indirectly involved in trade with them except some of the countries like Vietnam.



China retaliated with 25 percent tariffs on the US $50 billion of US imports and variable tariffs of 5 percent to 10 percent on the further US $60 billion of US imports. That was past and many believed that the trade war was going to be finished by negotiations but things went disturbingly wrong since Donald Trump surprised everyone by announcing plans for imposing tariffs again on Chinese imports.



One of the declarations came from Washington, and another from Beijing created lots of troubles that would end up making worse for both of their economies.

The US has failed to escalate its GDP in recent years. In 2018, the GDP growth of the US was 2.9% but due to the engagement in a trade war with China, it ended up with lower growth of 2.5% in 2019. IMF is now frightened to foresee  US growth of 1.8% by 2020 if the trade war never stopped within.

In contrast, China is also a big loser in terms of GDP increase(the Chinese Currency was manipulated well). China's GDP downfall from 6.6% in 2018 to 6.2% in 2019. Herein, IMF is expected to predict Chinese economic growth of 5.6% in the imminent future.

But That's not the way things currently look. China has played fast and loose with the rules of the global trading system. Mr. Trump is right somehow in his assessment that China would come off worse in a protectionist battle. No question, the US could win a trade war against China but it would be the dictionary definition of a Pyrrhic victory.


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