The Impact of the Trade War on the Military Industrial Complex of United States and China

Abstract

The chapter examines the current trade war between the United States and China and its impact on the two countries’ military industrial complex in relation to economic growth and development. The trade war has both positive and negative impacts on the country’s economic growth and development. Both countries depend heavily on each other for trade and account for an incredibly significant portion of the global trade. The trade war also impacts on the military industrial complex with respect to the defense budgetary allocation and trade in arms. One of the rationales for the trade war by the Trump Administration is to boost up the domestic economy, which would benefit the military industrial complex. Likewise, the retaliatory tariffs by China are designed to protect the domestic economy and showcase its ability to withstand and challenge the United States. The military industrial complex is important to both the countries. The chapter applied a quantitative design with canonical correlation method to multiple regression, where there are multiple intercorrelated outcome variables relative to military industrial complex and the processes of economic growth and development. It shows that trade wars in the form of increased imposed tariffs on each other by the United States and China has had no significant adverse effect on the Military Industrial Complexes of the two biggest economies of the world.

Citation

Kurantin, N. and Osei-Hwedie, B.Z. (2021), "The Impact of the Trade War on the Military Industrial Complex of United States and China", Das, R.C. (Ed.) Global Tariff War: Economic, Political and Social Implications, Emerald Publishing Limited, Leeds, pp. 243-257. https://doi.org/10.1108/978-1-80071-314-720211019