The trade dispute between the U. S. and China could also ensnare the American energy sector. Experts say that an offramp is needed — one that also benefits both economies and China’s environment.
USA and China Trade war: chess board Getty
Donald Trump’s trade war with China is causing uncertainties in both the financial markets and the overall economy. To that end, the U. S. oil and natural gas sectors could get seriously hurt unless both sides can save face or one side folds.
Economists agree on almost nothing — except that free and fair trade produces better business and healthier economies. And that axiom especially holds true when it comes to the relationship between the United States and China, considering that the Asian nation is the second biggest economy in the world and that it is a voracious consumer of oil and natural gas. In fact, the two economies are inextricably linked to the import-export markets.
In other words, as China increases its fortunes, there is corresponding wealth effect here. And the corollary to that is that the richer economies are better able to address environmental concerns. As China develops, it too would have the resources to cleanse its air and to address climate change.
“Trade is a win-win,” says Ray Keating, chief economist with the Small Business and Entrepreneurship Council . “Just think about the opportunities on the trade front: Western markets are largely free and they are the cleanest environmentally. Emerging economies are not. Trade between the two creates economic growth, which gives developing nations the wealth they need to clean up.”
Nearly a third of the U. S. economy is tied to either exporting products and services to China or importing goods from it, Keating adds, in an interview. Much of American economy is thus dependent on trading freely with China, meaning it is in both countries interest to end the dispute.
In fact, oil and natural gas make up 8% of the gross national product and provide nearly 10 million jobs in the United States, the American Petroleum Institute says. About 26 million jobs are tied to the global economy, adds the U.
