The Impact of the U.S.-China Trade War on the Economy in Uganda

: The trade war that erupted in 2018 originated from the United States imposing tariffs on Chinese goods and establishing trade barriers. This economic conflict affected global supply chains. Although Uganda did not directly participate in the war, its export sector was impacted. The purpose of this research is to explore the theoretical and empirical references for Ugandan policymakers and businesses to make informed choices about the impact of the U.S.-China trade war on Uganda's economy, trade, and investment from 2018 to 2021.

Grounded on the theoretical framework of economic trade wars, the literature review reflects the development of Uganda's economy and its impact. Different from other academic research, this research delves into empirical study to precisely identify the exact consequences of the U.S.-China trade war on Uganda's economy.  Utilizing the Autoregressive Distributed Lag (ARDL) model, the research further analyzes the short-term and long-term effects of trade disputes on key economic indicators, obtaining relevant evidence that promotes decision-making.

The research results indicate that the U.S.-China trade war has had a complex impact on Uganda's economy. Uganda's exports of goods to China have positively influenced the economy, while imports from both China and the United States also make a positive contribution due to Uganda's reliance on imported capital goods. Fluctuations in trade flows, particularly US exports to China and imports from China, have a positive effect on the growth of Uganda's Gross Domestic Product (GDP). On the other hand, rising prices and depreciation of the exchange rate have negatively affected the Uganda economy. Therefore, the study amends the first hypothesis that the U.S.-China trade war negatively impacts the growth of Uganda's GDP.  The second hypothesis is that deviations in exchange rates, trade flows, prices, and investment flows negatively affect the growth of Uganda's GDP. Utilizing the ARDL approach, the research confirms that deviations in trade flows, investment flows, exchange rates, and prices negatively impact GDP growth.

This research identifies the industries or products where Uganda has a competitive advantage or increased demand due to trade disruptions, thereby reveals specific trade opportunities for Uganda brought about by the U.S.-China trade war. This information can help businesses and policymakers focus on areas that may benefit from the trade war and explore new trade routes...... It makes this thesis a unique and valuable contribution within the literature on the impact of the U.S.-China trade war on emerging economies.