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China and U.S., Trade War or Not?

Trade War

On again, off again. That seems to be the current situation between China and the United States in regards to trade discussions and what some are calling a trade war.  Last year, U.S. Trade Representative, Robert Lighthizer and his team conducted a 7-month investigation, which found strong evidence that China uses foreign-ownership restrictions to compel U.S. companies to transfer technology to Chinese firms, known as Made in China 2025. In response to the investigation, President Trump announced a plan to impose tariffs on about $50-60 billion of Chinese annual imports into the United States targeting more than 100 different types of Chinese products. The value of these tariffs are based on U.S. estimates of economic damage caused by intellectual-property theft by China, according to American Journal of Transportation.  Then, in retaliation to the U.S.’s tariff announcement, the Chinese government also announced its own intent to impose 25% tariffs on 106 items imported from the United States, also valued at $50 billion (in 2017).

Discussions on the Table

Soon after, President Trump visited Beijing for trade discussions on the aforementioned statements.  He arrived back into the United States with a mutual consensus on some trade issues while acknowledging major disagreements on other matters with China.  A date has not been set for imposing tariffs on Chinese goods as trade discussions continue.  Both sides have outlined a series of tough demands and both while agreeing to keep discussions on the table.  In fact, it was even announced that the “Trump Administration suspended its plan to impose sweeping tariffs on China as it presses forward with trade talks.” [NY Times] That was on May 20, 2018.

Back at it Again

Less than 10 days later, on May 29, 2018, according to The New York Times, “President Trump, stung by criticism that he has gone soft on China and less worried about Beijing’s ability to disrupt a potential summit meeting with North Korea, reversed course on Tuesday and declared that the United States would impose tariffs and other punitive measures on China.” Once again, the China Tariff plan is back on, with a plan to impose tariffs on 1,300 Chinese products.  If this happens, China will withdraw all commitments on trade that it has made so far, and will most likely retaliate with its own tariffs.

China has an Offer

So, here we are today.  On June 5, 2018, Ana Swanson with The New York Times states, “China offered to purchase nearly $70 billion of energy, agricultural and manufactured products from the United States in the first year of a deal that would require the Trump administration to suspend tariffs on Chinese products, a person familiar with the talks said. The offer, which came during a meeting this weekend in Beijing between Commerce Secretary Wilbur Ross and the Chinese economic adviser Liu He, would go only partway toward President Trump’s initial demand that China reduce its $375.2 billion trade surplus with the United States by $200 billion annually. And it leaves untouched other American requests, including that China allow American companies more access to its markets and end practices that the Trump administration and business executives say force companies to transfer valuable intellectual property.”  According to the Washington Examiner, “The source said that the U.S. side didn’t offer anything to China in order to generate that offer, and that no agreement has yet been struck.”


Other Interesting Articles:

Why China Can’t Afford a Trade War

The NBA’s Role in the Trade War

The New York Times

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