[Photo/VCG] Exports to China supported 1.2 million jobs in the United States, which would see its employment and household incomes further benefit during the Biden administration from a de-escalation of the trade war, according to a new report released on Thursday. "The trade war with China hurt the US economy and failed to achieve major policy goals outlined by the Trump administration," noted a report on the value of the US-China economic relationship, published by the US-China Business Council (USCBC) in partnership with Oxford Economics. In all, the cost of the trade war amounted to around 0.5 percent of US GDP over 2018 to 2019, estimated Oxford Economics, a global advisory firm headquartered in England. "Rather than benefiting the economy, it has reduced US economic growth and employment, resulting in an estimated peak loss of 245,000 jobs," the report said. The report, released less than a week before President-elect Joe Biden takes office, paints a rosy picture of how improved trade relations between the world top two economies would help the US economy, which remains mired in a still raging COVID-19 pandemic. Biden, who has yet to announce a new trade policy, has underscored the "need to be able to build the very best in the United States and sell the very best around the world". "That means taking down trade barriers that penalize Americans and resisting a dangerous global slide toward protectionism," Biden wrote in an article in the 2020 March/April issue of Foreign Affairs magazine. "Policymakers would be wise to heed that advice and work toward rebuilding the strong bonds that exist between the US and China, to the benefit of both economies and the world," noted the USCBC and Oxford report. Even a moderate rollback in tariffs could render economic growth and stimulate employment growth during the Biden administration and beyond, according to the report. The US has left in place most of the new and increased tariffs on $360 billion worth of Chinese-made goods following the phase one trade deal it signed with China nearly a year ago. "Under our trade war de-escalation scenario, where both governments gradually scale back average tariff rates to around 12 percent (compared with around 19 percent now), the US economy produces an additional $160 billion in real GDP over the next five years and employs an additional 145,000 people by 2025," the report said. US household income would be $460 higher per household as result of increased employment and incomes as well as lower prices, according to the report. On the other hand, escalating trade tensions and significant decoupling with China would hurt the US economy further and reduce employment. "Our trade war escalation and decoupling scenario sees the US economy produce $1.6 trillion less in real GDP terms over the next five years and results in 732,000 fewer jobs in 2022 and 320,000 fewer jobs in 2025," the report said. During the Trump administration, tariffs have resulted in "weaker trade flows" to and from China, with each round of tariff increases leading to declines in bilateral imports and exports, according to the report. It said that in 2019, the US exported $106 billion in goods to China, a decline of 18 percent from 2017, while imports fell by 11 percent over the same period. The combination of higher tariffs, reduced trade flows and heighted tensions damaged the US economy, firms and households by raising consumer prices, dampening investment and hurting company competitiveness and profit margins, noted the USCBC and Oxford joint report. Still, exports to China in 2019 supported 1.2 million jobs in the US, and as of 2018, 197,000 people in the US were directly employed by Chinese multinational firms, according to the report. It further noted that US companies invested $105 billion in China in 2019, and the profits from these investments and the contribution they make to the competitiveness of US businesses help support the US economy through R&D, domestic investment, and dividend payments. "With China forecast to drive around one-third of global growth over the next decade, maintaining market access to China is increasingly essential for US businesses' global success," the report said.