China–United States trade war: Difference between revisions

This article is part of a series about Donald Trump
Business and personal Business career The Trump Organization wealth tax returns Media career The Apprentice bibliography filmography Endorsements Eponyms Family Foundation American football Golf Honors Public image in popular culture SNL parodies handshakes Legal affairs Sexual misconduct allegations Nicknames pseudonyms Racial views Comments on John McCain Conspiracy theories Residences Rhetoric Security incidents 45th & 47th President of the United States Presidencies first second timeline Transitions first second Inaugurations first second Presidential library Tenure Executive actions executive orders proclamations pardons Trips foreign '17 '18 '19 '20–'21 Namaste Trump North Korea summits Singapore Hanoi DMZ Riyadh summit Helsinki summit Shutdowns January 2018 2018–2019 Polls Legal affairs Protests federal law enforcement deployment St. John's Church photo op Social media False or misleading statements Killings al-Baghdadi Soleimani Afghanistan withdrawal Trumpism TikTok controversy Policies Economy tax cuts tariffs China trade war farmer bailouts Environment Paris withdrawal Foreign policy America First Saudi Arabia arms deal Iran nuclear deal withdrawal Jerusalem Golan Heights Palestine peace plan Abraham Accords USMCA United States–Taliban deal Immigration travel ban wall family separation migrant detentions troop deployments national emergency Infrastructure Social issues First Step Act cannabis Space Appointments Cabinets first second Ambassadors first second Federal judges first second Gorsuch Kavanaugh Barrett Supreme Court candidates Executives first second U.S. Attorneys first second Presidential campaigns 2000 primaries 2016 election primaries endorsements rallies Las Vegas incident convention debates Make America Great Again Never Trump movement people Access Hollywood tape wiretapping allegations Spygate 2020 election primaries endorsements political non-political opposition rallies convention debates GOP reactions to election fraud claims Trump–Raffensperger phone call 2024 election primaries endorsements opposition eligibility Agenda 47 rallies convention debates assassination attempts PA perpetrator photographs FL suspect Impeachments Efforts resolutions First impeachment Trump–Ukraine scandal House inquiry Senate trial Second impeachment Capitol attack Senate trial Proposed expungements Civil and criminal prosecutions 2020 election federal indictment Classified documents federal indictment special counsel investigation Plasmic Echo FBI search of Mar-a-Lago Trump v. United States New York indictment Stormy Daniels scandal Karen McDougal affair financial fraud Georgia election indictment Georgia election investigation mug shot COVID-19 pandemic Taskforce Communication Government response stimulus bills CARES Act Consolidated Appropriations Act, 2021 Operation Warp Speed White House outbreak Interference with science agencies
v t e

This article is part of a series about Xi Jinping
Personal Early life and education Xi Zhongxun (Father) Administration 2012 election as General Secretary 2017 reelection as General Secretary 2022 reelection as General Secretary New Zhijiang Army Policies and theories Belt and Road Initiative Chinese Dream Common prosperity Four Confidences Four Comprehensives Comprehensively Deepening Reforms Chinese-style modernization Foreign policy Eight Musts Eight-point Regulation Three red lines Dual circulation New productive forces Targeted Poverty Alleviation Two Establishes and Two Upholds Thought culture diplomacy Holistic security concept Personality cult Party media takes the party's last name Three Stricts and Three Honests Two Centenaries Wolf warrior diplomacy Whole-process people's democracy Key events Anti-corruption campaign 709 crackdown Persecution of Uyghurs in China Xinjiang internment camps China–US trade war 2019–20 Hong Kong protests COVID-19 pandemic response CCP centenary Historical resolution 2020–2021 reform spree 2022 Hong Kong visit Diplomatic activities Xi–Chu meeting Xi–Ma Meeting Xi–Kim meetings 2015 Pakistan visit 2015 United States visit 2015 United Kingdom visit 2019 Italy and France visit CPC and World Political Parties Summit 2023 Russia visit 2024 France, Serbia and Hungary visit Works Speech series The Governance of China The Hopes of President Xi Zhijiang Xinyu
v t e

China and the United States are locked in an ongoing trade conflict as each country has introduced tariffs on goods traded with the other. US President Donald Trump had promised in his campaign to fix China's "longtime abuse of the broken international system and unfair practices". Starting in January 2018 the U.S imposed a tariff on solar panel imports, most of which are manufactured in China.^[1] On July 6, the U.S. specifically targeted China by imposing 25% tariffs on $34 billion of imported Chinese goods^[2] as part of Trump's tariffs policy, which then led China to respond with similarly sized tariffs on U.S. products. A tariff on an additional $16 billion of Chinese imports was added in mid August,^[3] with China responding proportionately.^[4] A further tariff on $200 billion of Chinese goods is to go into effect on September 24,^[5] to which China plans to respond to with tariffs on $60 billion of US goods.^[6] The Trump administration said the tariffs were necessary to protect intellectual property of U.S. businesses, and to help reduce the U.S. trade deficit with China.^[7][8]

The U.S. administration is relying partly on Section 301 of the Trade Act of 1974 to prevent what it claims are unfair trade practices and theft of intellectual property. ^[9][10] This gives the president the authority to unilaterally impose fines or other penalties on a trading partner if it is deemed to be unfairly harming U.S. business interests.^[11] Trump had already, in August 2017, opened a formal investigation into attacks on the intellectual property of the U.S. and its allies, the theft of which cost the U.S. alone an estimated $225–600 billion a year.^[12][13]

Wikisource has original text related to this article:

Remarks by President Trump to the 73rd Session of the United Nations General Assembly

Wikisource has original text related to this article:

Remarks by Vice President Pence on the Administration's Policy Toward China

The United States International Trade Commission publishes all tariffs in the document "Harmonized Tariff Schedule of the United States"^[14]

Generally, tariffs depends on exporting countries which are treated in one of three different groups:

• 1. Privileged countries such as most developing countries and countries with trade agreements such as NAFTA. Tariffs here are zero for most products.
• 2. "Rate of duty column 2" is enhanced tariffs for legal trade with Cuba and North Korea
• 3. All other countries.

The tariffs are typically given as a percentage of value, but it can also be given per Kg weight or per unit.

President Trump placed a 30% tariff on foreign solar panels on January 23, 2018, to be reduced to 15% after four years.^[15][16] China, the world leader in solar panel manufacture, decried the tariffs.^[17] That same day, tariffs of 20% were placed on washing machines for the first 1.2 million units imported during the year. In 2016, China exported $425 million worth of washers to the United States.^[18][19]

President Trump asked the United States Trade Representative (USTR) investigate applying tariffs on US$50-60 billion worth of Chinese goods, on March 22.^[8][20][21] He relied on Section 301 of the Trade Act of 1974 for doing so, stating that the proposed tariffs were "a response to the unfair trade practices of China over the years", including theft of U.S. intellectual property.^[7][8] Over 1,300 categories of Chinese imports were listed for tariffs, including aircraft parts, batteries, flat-panel televisions, medical devices, satellites, and various weapons.^[22][23]

China responded on April 2 by imposing tariffs on 128 products it imports from America, including aluminum, airplanes, cars, pork, and soybeans (which have a 25% tariff), as well as fruit, nuts, and steel piping (15%).^{[9][10][24][25]} On April 5, Trump responded saying that he was considering another round of tariffs on an additional $100 billion of Chinese imports as Beijing retaliates.^[26] The next day the World Trade Organization received request from China for consultations on new U.S. tariffs.^[27]

Vice Premier Liu He, top economic adviser to Communist Party general secretary Xi Jinping, visited Washington from May 15 to 19 for further trade talks^[28][21]. It was reported on May 20 that Chinese officials had agreed to "substantially reduce" America's trade deficit with China^[28] by committing to "significantly increase" its purchases of American goods. As a result, Treasury Secretary Steven Mnuchin announced that "We are putting the trade war on hold".^[29] White House National Trade Council Director Peter Navarro, however, said that there was no "trade war," but that it was a "trade dispute, fair and simple. We lost the trade war long ago."^[30]

The White House announced on May 29 that it would impose a 25% tariff on $50 billion of Chinese goods with "industrially significant technology;" the full list of products affected to be announced by June 15.^[31] It also planned to impose investment restrictions and enhanced export controls on certain Chinese individuals and organizations to prevent them from acquiring U.S. technology.^[32] China said it would discontinue trade talks with Washington if it imposed trade sanctions."^[33]

On June 15, Trump declared in a short White House statement that the United States would impose a 25% tariff on $50 billion of Chinese exports. $34 billion would start July 6, with a further $16 billion to begin at a later date.^[34][35][36] China's Commerce Ministry accused the United States of launching a trade war and said China would respond in kind with similar tariffs for US imports, starting on July 6.^[37] Three days later, the White House declared that the United States would impose additional 10% tariffs on another $200 billion worth of Chinese imports if China retaliated against these U.S. tariffs.^[21] The list of products included in this round of tariffs was released on July 11 and was set to be implemented within 60 days.^[38]

China retaliated almost immediately, threatening its own tariffs on $50 billion of U.S. goods, and claimed the United States had "launched a trade war." Import and export markets in a number of nations feared the tariffs would disrupt supply chains which could "ripple around the globe."^[39]

American tariffs on $34 billion of Chinese goods came into effect on July 6, 2018. China imposed retaliatory tariffs on US goods of a similar value. The tariffs accounted for 0.1% of the global gross domestic product.^[40][41] On July 10, U.S. released an initial list of the additional $200 billion of Chinese goods that would be subject to a 10% tariff.^[42] China vowed to retaliate with additional tariffs on American goods worth $60 billion annually two days later.^[43]

On August 8 the Office of the United States Trade Representative published it's finalized list of 279 Chinese goods, worth $16 Billion, to be subject to a 25% tariff from August 23.^{[3] [44][21]} China responded with its own tariffs of equal value when the American tariffs were implemented on August 23.^[4]

On August 14 China filed a complaint with the World Trade Organisation (WTO), claiming that US tariffs on foreign solar panels clash with WTO ruling and have destabilised the international market for solar PV products. China claimed the resulting impact directly harmed China’s legitimate trade interests.^{[citation needed]}

US Treasury Under Secretary David Malpass and Chinese Commerce Vice Minister Wang Shouwen met on August 22 in Washington DC in a bid to open up dialogue in response to the intensifying trade war, yet discussions ended with no resolution. By August 23, US implemented a further 25% of tariffs on $16 billion of goods as promised, which was reciprocated by China. China filed a new WTO complaint against the US as a result of this tariff escalation.^[45]

On September 17 the US announced its 10% tariff on $200 billion worth of Chinese goods would begin on September 24, increasing to 25% by the end of the year. They also threatened tariffs on an additional $267 billion worth of imports if China retaliates,^[5] which China promptly did on September 18 with 10% tariffs on $60 billion of US imports^[46].^[6] So far, China has either imposed or proposed tariffs on $110 billion of U.S. goods, representing most of its imports of American products.^[5]

During a campaign speech in June 2016, President Trump vowed to cancel international trade deals and go on an offensive against Chinese economic practices, describing his promise as a reaction against "a leadership class that worships globalism."^[47] In April 2018, Trump denied that the dispute was actually a trade war, saying "that war was lost many years ago by the foolish, or incompetent, people who represented the U.S." He added: "Now we have a trade deficit of $500 billion a year, with intellectual property (IP) theft of another $300 billion. We cannot let this continue."^[48][49]

In January 2018, Trump said he wanted the United States to have a good relationship with China, but insisted that it treat the United States fairly.^[50] In his State of the Union Address a few weeks later, he stated:

America has also finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs, and our Nation’s wealth. The era of economic surrender is over. From now on, we expect trading relationships to be fair and to be reciprocal. We will work to fix bad trade deals and negotiate new ones. And we will protect American workers and American intellectual property, through strong enforcement of our trade rules.^[51][52]

A number of government and industry experts have offered their own rationales about why the tariffs are, or are not, appropriate:

John Ferriola, the CEO and President of Nucor, America's largest steel producer and its largest metal recycler, claimed that tariffs were not unfair, but were "simply leveling the playing field." He explained to TV host Jim Cramer, that not only the "European Union, but most countries in the world, have a 25 percent or greater VAT, value-added tax, on products going into their countries from the United States. So if we impose a 25 percent tariff, all we are doing is treating them exactly as they treat us."^[53] VAT (value added tax) is a sales tax which is charged regardless of origin.

Analyst Zachary Karabell claimed that the administration's desire to reject long-standing trade consensus in favor of a more nationalist approach will not succeed: "A set of very public and punitive tariffs will not reverse what has already been transferred and will not do much to address the challenge of China today, which is no longer a manufacturing neophyte."^[54]

Peter Navarro, White House Office of Trade and Manufacturing Policy Director, gave a number of the administration's explanations for the tariffs, among them are that they are "purely defensive measures."^[55] He claims that the cumulative trillions of dollars Americans transfer overseas as a result of yearly deficits, are then used by those countries to buy America's assets, as opposed to investing that money in the U.S. "If we do as we're doing . . . those trillions of dollars are in the hands of foreigners that they can then use to buy up America."^[56]

Richard Trumka, president of the AFL-CIO, which represents over 12 million active and retired workers, said that China has stolen U.S. intellectual property and "bullied its way into acquiring critical U.S. advances in technology." He stated in March 2018 that "Tariffs aren’t an end goal, but an important tool to end trade practices that kill American jobs and drive down American pay."^[57]

A number of experts have focused on what they consider China's "theft" of intellectual property, and that it forces U.S. firms that want to do business there into transferring its confidential technology and trade secrets before having access to their market. Although that kind of transfer is disallowed by the WTO, the negotiations are usually conducted in secret to avoid penalties.^[58] In 2018 the American Chamber of Commerce in China learned that over half its members thought that "leakage of intellectual property" was an important concern when doing business there.^[58] Similarly, the EU Chamber of Commerce has also complained that European companies wanting access to the Chinese market often had to agree to transfer vital technology.^[59]

U.S. Trade Representative Robert Lighthizer, after a seven-month investigation into China and intellectual property, explained that the value of the tariffs imposed was based on U.S. estimates of the actual economic damage caused by China’s alleged IP theft and the forced transfer of technology to Chinese companies.^[60] In response, Chinese Premier Li Keqiang promised in March 2018 to henceforth protect the rights of foreigners investing in its economy,^[60] followed in April by an announcement by China that it would eliminate laws that required global automakers and shipbuilders to work through state-owned partners.^[61]

Chinese paramount leader Xi Jinping reiterated those pledges, affirming a desire to increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property, all central issues in Trump’s complaints about their trade imbalance.^[62] Trump thanked Xi for his "kind words on tariffs and automobile barriers" and "his enlightenment" on intellectual property and technology transfers. "We will make great progress together!" the president added.^[62]

National security experts say Chinese hackers have consistently stolen trade secrets from U.S. defense contractors. This prompted former National Security Agency head Keith Alexander to describe Beijing’s practices as "the greatest transfer of wealth in history." He states:^[12]

Chinese spies have gone after private defense contractors and subcontractors, national laboratories, public research universities, think tanks and the American government itself. Chinese agents have gone after the United States’ most significant weapons, such as the F-35 Lightning, the Aegis Combat System and the Patriot missile system; illegally exported unmanned underwater vehicles and thermal-imaging cameras; and stolen documents related to the B-52 bomber, the Delta IV rocket, the F-15 fighter and even the Space Shuttle. President Trump’s action on Monday acknowledges the broad scope of the challenge.^[12]

In August 2018, U.S. Secretary of Commerce Wilbur Ross said that "at the end of the day, we have many more bullets than they do. They know it."^[63]

U.S. commerce secretary Wilbur Ross said that the planned Chinese tariffs only reflected 0.3% of U.S. gross domestic product, and press secretary Sarah Huckabee Sanders stated that the moves would have "short-term pain" but bring "long-term success".^{[64][49][65][48]} Nucor's John Ferriola said that even with the tariffs on steel, the cost of an average $36,000 car would go up about $160, less than 1/2 of 1%, while a can of beer would only cost an extra penny more.^[53]

After president Trump imposed tariffs against a number of allies, including Mexico, Canada and countries in the EU, G7 finance leaders strongly condemned the tariffs and planned retaliating with tariffs of their own.^[66]

By early July 2018, there were negative and positive results already showing up in the economy as a result of the tariffs, with a number of industries showing employment growth while others were planning on layoffs.^[67]

In anticipation of tariffs going into effect, stock prices in the U.S. and China sustained significant^[vague] losses for four to six weeks prior.^[when?] Trade war fears had led to a bear market in China where by late June the total value of the country's stock markets was 20% lower than it had been at the beginning of 2018 when it reached record levels.^[68] The Japanese Nikkei also suffered a "three-week pullback".^[69] On July 6, when the tariffs went into effect, markets rebounded and rallied due to positive jobs report in the U.S.^[70] Asian markets similarly rebounded, ending the day in a high note. According to the Associated Press, the positive reaction to the tariffs in U.S. and Asian markets was because of an end to uncertainty^[70] and, according to Investor's Business Daily, because "markets had largely priced in the impact".^[69]

Following announcements of escalation of tariffs by the U.S. and China, representatives of several major U.S. industries expressed their fears of the effects on their businesses. Organizations critical of the intensifying trade war included National Pork Producers Council, American Soybean Association, and Retail Industry Leaders Association. Several mayors representing towns with a heavy reliance on the manufacturing sector also expressed their concerns.^[71] In September, a business coalition announced a lobbying campaign called "Tariffs Hurt the Heartland" to protest the proposed tariffs.^[72]

Proponents of the increased U.S. tariffs included Scott Paul, president of the Alliance for American Manufacturing.^[71]

• United States-China relations
• Cold War II
• Death by China / The Coming China Wars
• Congressional-Executive Commission on China / United States-China Economic and Security Review Commission / Cox Report
• Chinese espionage in the United States / List of Chinese spy cases in the United States / Chinese intelligence activity abroad / Criticism of Confucius Institutes#Espionage
  • Cyberwarfare in China / Chinese Information Operations and Information Warfare / People's Liberation Army Strategic Support Force / PLA Unit 61398 / PLA Unit 61486 / Honker Union / Red Hacker Alliance / GhostNet
  • Office of Personnel Management data breach / Supermicro#Claim of Chinese hardware manufacturing breach / Titan Rain / Night Dragon Operation / Operation Shady RAT / Operation Aurora / Yahoo! data breaches / Death of Shane Todd
• Non-tariff barriers to trade
  • Censorship in China / Internet censorship in China / Great Firewall / Silenced: China's Great Wall of Censorship / Radio jamming in China / Mass surveillance in China / Censorship in Hong Kong
• Counterfeit consumer goods / Anti-Counterfeiting Trade Agreement / TRIPS Agreement / Shanzhai
  • PROTECT IP Act / Stop Online Piracy Act
• First 100 days of Donald Trump's presidency / Economic policy of Donald Trump / Trump tariffs /Foreign policy of Donald Trump
• Protectionism in the United States / Smoot–Hawley Tariff Act (1930)