The US-China Trade War


Ever since the campaign trail, one of the biggest points for US President Donald Trump was the perceived unfair trade practice by China, citing intellectual property abuses, especially in the tech industry, tariffs, and a growing trade deficit.  So what has happened since then?

The Trump administration, trying to help revitalize the manufacturing industry first imposed tariffs on steel coming from any other nation, including China.  China then released its own list of tariffs on US products totalling to around $3 billion. However, through this, it started escalating from US proposals to increase the tariffs to $50 billion worth of Chinese goods and China responding likewise.  This ultimately led to a two part phase where the US imposed tariffs of roughly $200 billion on Chinese products in September of 2018 with threats of an additional $260 billion if a deal was not reached. China promptly followed suit with an additional $110 billion in tariffs.  The situation, while initially stemming from a couple billion dollars as since escalated to a matter of a couple hundred billion dollars which could potentially lead to all Chinese imports to be subject to tariffs. While the goal of any tariff is to make any imported goods more expensive to allow for local products to be comparatively cheaper, the consequences of this economic war have been detrimental to the American people.  For example, many technological components have microchips that are assembled in China which has led to an increase in prices. These tariffs have gone from trying to create an equal playing field for local companies to becoming punitive in nature to try and force a deal.

In addition, the US also started investigations into Chinese economic espionage.  On October of 2018, two alleged Chinese officers were indicted on charges of a conspiracy to steal US jet propulsion technology.  In addition, the US announced that it would take measures to try and curtail intellectual property theft from Chinese technology companies such as Huawei and ZTE.  The ramifications have not stayed within these two countries. In early December, the Canadian government announced its arrest of Huawei’s Chief Financial Officer, Meng Wanzhou for intellectual property theft and bank fraud.  Later that month, in retaliation, a former Canadian diplomat was arrested in China.

On December 2, the two countries have declared a temporary 90 day truce.  On January 7, the two countries were set to engage in trade talks in Beijing, however, due to disagreements on intellectual property rules, this was cancelled.  At the end of the January, they were supposed to have another set of trade talks in Washington, however, President Trump cancelled these later stating that he would not meet with Chinese President Xi until after the truce expires which is on March 1.  Right now, all we can do is wait and see how these two nations will settle this increasingly pressing issue.