U.S. sales of cars, trucks and parts also fell to just 33 percent of the previous target. Before the trade war, China was the second largest export market for U.S. vehicles. In July 2018, China returned the favor against Trump`s tariffs with a 25% tariff on U.S. cars. U.S. exports then fell by more than a third due to the relocation of production for Chinese consumers to other sites and the non-recovery of U.S. exports since then. Tesla, for example, announced in late 2018 that it would accelerate construction of a new plant in Shanghai and relocate U.S. production to Chinese consumers.

The company stressed that Trump`s tariffs on auto parts and China`s retaliatory measures against finished cars had not made U.S. exports to China competitive. In response to this trade war policy, BMW relocated some of its production from South Carolina to China.5 On August 14, 2019, the Dow fell 800 points, in part due to growing trade tensions between the United States and China. [236] Nine days later, on August 23, the Dow fell 623 points on the day Trump informally ordered U.S. companies to immediately seek alternatives to do business in China. [237] [238] At the end of 2019, stock markets reached record levels after increasing due to the agreement between the United States and China on the signing of the first phase of a trade agreement. [239] [240] The trade war has had a negative impact on the economies of the United States and China. [12] [13] [14] In the United States, this has led to higher prices for consumers and financial hardship for farmers.

In China, the trade war contributed to the slowdown in economic and industrial output growth, which was already declining. Many U.S. companies have relocated to other Asian countries by supply chain, raising fears that the trade war could lead to an economic “decoupling” between the United States and China. [15] In other countries, the trade war has also caused economic damage, although some countries have benefited from increased production to fill the gaps. It has also caused instability in the stock markets. Governments around the world have taken steps to repair some of the damage caused by economic conflict. [16] [17] [19] [19] In the wake of the Galwan Valley turmoil in 2020, Indian commentators referred to the trade war between the United States and China as part of their comprehensive analysis of the impact of the skirmish on future relations between India and China. [339] [340] [341] [342] [343] [344] [344] [344] [344] Former Vice President Joe Biden said, “While Trump is waging a harmful and unpredictable trade war, with no real strategy, China is positioning itself to lead the world in the field of renewable energy.” [327] A senior Trump administration official said the monetary agreement was based on provisions of the U.S.-Mexico trade agreement, which require the three countries to disclose monthly data on international reserve balances and foreign exchange market interventions, as well as quarterly balance-of-payments and other public statements to the International Monetary Fund.