THE SINO–US TRADE WAR AND GLOBAL ECONOMIC DISRUPTIONS: A NEO-MERCANTILIST ANALYSIS (2018–2023)

Abstract

Sino-US trade relations are a cornerstone of global economic dynamics, but in recent
years, they have been marked by escalating tensions, resulting in what is now known as the ‘trade
war.” This paper explores the ideological underpinnings and global economic consequences of the
Sino-US trade war. It also highlights the broader implications of trade wars in the context of global
crises, such as economic slowdowns, supply chain disruptions, and geopolitical shifts. It adopts a
qualitative design, relying on secondary sources of data. By reviewing the economic theory “neo-
mercantilist theory” behind trade wars and analysing real-world data, this paper provides a
comprehensive understanding of the trade conflict and its role in shaping global economic crisis.
The study identified the following key findings: firstly, the increasing trade deficit of the United
States, coupled with China’s military expansion, was a primary driver of the US-China trade
conflict. Secondly, this trade war precipitated significant crises across global economic, financial,
market, and trade sectors. Against the backdrop, it recommends first, the need for US and China to
engage in sustained diplomatic negotiations to help de-escalate tensions, address trade imbalances,
and create frameworks for fairer global trade practices, thereby mitigating future risks of conflict;
Second, the necessity for businesses and nations to diversify their supply chains, thereby reducing
dependency on single markets, especially in high-risk areas.