For decades, the world's two largest economies — the U.S. and China — have been integrated.

But the
Trump administration is now trying to undo that, as an escalating trade war impacts consumers and
businesses in both countries. The trade war is not only going to affect businesses and consumers
America but also in China. In fact, during the past two decades, the share of Chinese income earned by
Chinese households has been the lowest of any country in modern history. That means that Chinese
workers can consume only a small share of what they produce.

There are no real winners in this US-initiated trade war. Countries facing new tariffs, including the
United States, experience declines in real exports and GDP. Other countries are hit indirectly through
weaker demand for their own exports, either through supply chains or in response to weaker global
economic growth.

Both parties US and Chian lose from the trade war, but the numbers suggest that the damage to the U.S.
side is greater, in percentage terms.
President Donald Trump in 2018 began setting tariffs and other trade barriers on China with the goal of
forcing it to make changes to what the U.S. says are "unfair trade practices".

In the United States, the trade war has brought struggles for farmers and manufacturers and higher
prices for consumers.

In other countries it has also caused economic damage, though some countries have benefited from
increased manufacturing to fill the gaps. It has also led to stock market instability. The governments of
several countries, including China and the United States, have taken steps to address some of the
damage. The trade war has been criticized internationally; in the U.S., businesses and agricultural
organizations have also been critical, though most farmers continued to support Trump. Among U.S.
politicians the response has been mixed.

Globally, foreign direct investment has slowed. The trade war has hurt the European economy,
particularly Germany, even though trade relations between Germany and China and between Germany
and the U.S. remain good. The Canadian economy has seen negative effects as well. Like the U.S.,
Britain, Germany, Japan, and South Korea were all showing "a weak manufacturing performance" as of
2019. Several Asian governments have instituted stimulus measures to address damage from the trade
war, though economists said this may not be effective.

Some countries have benefited economically from the trade war, at least in some sectors, due to
increasing exports to the United States and China to fill the gaps left by decreasing trade between these
two economies. Beneficiaries include Vietnam, Chile, Malaysia, and Argentina. Vietnam is the biggest
beneficiary, with technology companies moving manufacturing there. South Korea has also benefited
from increased electronics exports, Malaysia from semiconductor exports, Mexico from motor vehicles,
and Brazil from soybeans. However, US-ASEAN Business Council CEO Alex Feldman warned that even
these countries may not benefit long-term, saying that "It's in everyone's interest to see this spat get
resolved and go back to normal trade relations between the US and China."