The commercial war between US and China

China and the U.S. have the largest, most powerful economies in the world. Their impact on the international economy is undeniable. So the trade war between these two countries has rarely been out of our news ever since it started back in 2018; unless you’ve been sleeping under a rock, that is! With the signing of the US-China Phase One trade deal on January 15th, 2020, are we about to see an end to this standoff? 

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The trade war: a little history

Dissatisfaction with the way China does business — and let’s be honest, how successful it is at it — are not new things at all. China wasn’t even allowed to join the World Trade Organization until 2001. 

Since then there have been accusations about China discriminating against foreign businesses in the country, violation of intellectual property rights, and generally not acting in the spirit of free trade. China has worked to comply with the regulations imposed on it by the WTO, though has argued that all it has been doing is protecting its domestic economy. Which is something America is constantly striving to do, often to the detriment of other nations—as does every other nation; why when China does this do we see the practice as unfair? 

Trump setting tariffs on Brazil and Argentina, and attempting to on Mexico, is acceptable, apparently, while China has always been criticised for such efforts. We also as a world are outraged that China exports goods made in forced labor camps or prisons; something we demand international cooperation on to ensure those workers are fairly treated. Yet America is free to let its companies use prison labour, like that of Prison Enterprises, without interference from the international community. Interesting.

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A summary of events

The commercial war between the U.S. and China dates back to January 2018, when America announced tariffs on solar panels and washing machines from China. Then in March came the tariffs on steel and aluminium from all countries. Then back to China alone, with tariffs on aircraft parts, medical devices, satellites, and so on. By May, after similar tariff rises by China on American goods, China agreed to reduce America’s trade deficit. Yet by the end of the month America was announcing another tariff on $50 billion in Chinese products. And so on, back and forth, America and China retaliating like children across a very large playground. 

In May 2019, tariffs against China were raised higher still. America also began restricting the export of U.S. information and communications technology to “foreign adversaries” — meaning China without specifically mentioning the country. When world nations do the equivalent of vague Tweeting about each other, isn’t it time for us all to leave the planet? 

August saw Trump announcing China wanted to talk about the back and forth tit-for-tat going on between the two countries, when no such offer to talk had been made. American Free Trade, a group of American businesses, wrote to the White House asking that tariff increases were postponed because of the impact of the trade was on American businesses. These businesses were branded weak by the president for daring to say such a thing. Charming. 

China then imposed more tariffs on America in early September, which of course America had to rally against with yet more tariffs. We could list every single tariff increase and snide comment on both sides of this war since this trade war began but we’re sure you get the picture by now and have better things to do with your days.

Photo via Pixabay

The US-China Phase One trade deal 

As of January 15th 2020 the U.S. and China have reached a trade agreement that relies on bilateral agreement rather than international mediation. It is supposed to focus on contentious issues like international property rights, technology transfer, agriculture, exchange rates, and trade expansion. Peace at last! Except; many believe the agreement is a disaster. There is no focus on the issues that have caused the rift between the two countries, with Trump apparently focusing on the $200 billion in U.S. goods China has agreed to buy and little else. Time will tell, though it seems obvious this is but a pause in the trade war and the fall out from it will long continue.

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