Since January 2018, the United States of America (USA) and China have been involved in an intense trade war that continues to escalate by the day. Trump’s campaign promises were very American-centric and one of his key messages was around addressing the issue of China’s unfair trade practices caused by loopholes in the international trade system. The last few weeks have seen media reports about USA doubling tariffs on $200 billion of Chinese goods, resulting in China retaliating by increasing tariffs on $60 billion worth of American imports. The tariff hike – especially on Chinese commodities – poses a serious threat to China’s trade because the USA is one of their biggest export partners. In 2018 alone, the USA imported $539 billion worth of goods from China – mainly computers, electronics and electrical equipment.
I can’t help but liken the current trade war between the two economic giants to the battle of the queens in Game of Thrones (a bit drastic I know, but hear me out). If you are a staunch Game of Thrones fan like I am, you must have been following the latest (and last) season of the mega TV series. HBO released its audience statistics for the premiere episode of Game of Thrones – Season 8, announcing that it drew a record of 17.4 million viewers on the Sunday it premiered. This beat both the 16.1 million viewers who caught the Season 7 premiere and the 16.9 million viewers who tuned in for the same seasons’ finale. Based on these stats I felt it appropriate to use some illustrations from the latest season evidenced by the popularity of the show. I would like to make reference to the events of Episodes 4 and 5 of Season 8. At the end of Episode 4, the two queens in Westeros (the mother of dragons and Cersei Lannister who sits on the iron throne) meet with their armies to discuss terms in an attempt to prevent a ll-on war with each one asking the other to back down. At the end of the parley none of the parties agrees to back down and it becomes obvious a full blown war is inevitable. In Episode 5 titled “The Bells”, the battle for the iron throne begins.
The armies stand in position for war and we see the epic scenes of the “mother of dragons” flying over Kings Landing with her fire spitting dragon burning the city to ashes. At the end of the episode the dragon queen emerges victorious but the collateral damage is colossal. The entire city and everything in it is burnt to ashes together with all the innocent citizens of Kings Landing.
The USA and China can be likened to the two queens of Westeros – and the rest of the world being the innocent citizens of Kings Landing. I will leave it to you in deciding which country is the “mother of dragons” and which country is Cersei Lannister.
Countries like Zambia whose economies rely heavily on trade with China will suffer the consequences of this trade war if the two economic giants don’t come to a mutually beneficial agreement. China consumes half of the world’s copper produce, with recently released trade data showing that the country’s import of raw copper fell to 311,000 tonnes from 479,000 tonnes last month. A reduction in China’s production due to tariff hikes by the USA adversely impacts the demand for copper and other commodities on the global market. Zambia’s main export is copper which accounts for 60% of the country’s total exports – from this China consumes over 20% of the production. A reduction in copper imports by China will result in a domino effect with the eventual outcome being lower copper export revenues.
It’s important that we stay tuned and keep a close eye to this “Game of Thrones”between the two biggest economies and keep our fingers crossed that our country’s fate will not be similar to the one of the innocent citizens in Kings Landing. If the two giants don’t come to a mutually beneficial agreement, the collateral damage on economies such as that of Zambia will be immense.