For over two years, the enduring and entrenched US/China trade war has been a lengthy and complex battle, marked by several episodes of tension escalation and de-escalation. In this exegesis, we will embark on a thorough and meticulous investigation of the abecedarian provenance, the convoluted trajectory of development, and the myriad implications of this contentious trade impasse, as well as a shrewd and astute examination of the potential permutations and combinations of future US/China relations.
Background of the US/China Trade War
Pre-Trump Administration
For many years, the puzzling and turbulent interaction of US-China economic ties has been a source of turbulence, cloaked in a maze of conflicting viewpoints and attitudes on trade policy that dates back to the 1970s. The two countries continued to experience a chorus of discordant arguments despite attempts at bilateral trade agreements in the 2000s, leading to a complicated and difficult commercial relationship that is still unresolved today.
Trump Administration
The Trump administration’s decision to impose tariffs on Chinese imports in 2017 was justified by the claim that China was engaging in egregious trade practices, including the covert theft of intellectual property. As a result, the US purchased more commodities than it exported, which widened the trade deficit between the US and China. This prompted the Trump administration to take a more aggressive stance toward China, which resulted in difficult trade discussions and a series of retaliatory penalties from both countries.
Escalation of the US/China Trade War
US Tariffs
The Trump administration adopted the daring stance of placing tariffs on a variety of Chinese goods, stretching across the different fields of electronics, clothes, and equipment, amid the intense waves of international trade conflicts. These tariffs have wide-ranging effects on both the US and Chinese economies, causing seismic changes in their respective economies. On the American front, the tariffs sparked a negative domino effect that led to an increase in the cost of consumer products, worsening the already precarious financial situation of the downtrodden American people. The Chinese economy, on the other hand, was severely impacted by the negative impacts of the tariffs as a result of a dramatic decline in the demand for its vital exports and a corresponding reduction of its economic development, fleeing the nation.
Chinese Tariffs
China responded to the protectionist measures taken by the United States by imposing hefty tariffs on a number of American goods, including soybeans, pork, and cars. American farmers who were already suffering from the pandemic’s devastating economic effects were made much worse off by these trade restrictions, and they felt the negative effects of these Chinese tariffs severely. The effects of these tariffs also extended beyond the home market since the fall in US exports to China set off a chain reaction that rippled across the whole global economy and resulted in a dramatic slowdown in American economic growth.
US Retaliation
The Trump administration replied to the Chinese duties by placing a new wave of tariffs on a number of Chinese products amid the escalating economic tensions between China and the US. Products from a wide range of sectors, including furniture, chemicals, and medical equipment, were targeted. The US and Chinese economies were predicted to be significantly impacted by this retaliatory action.
The US government’s increased tariffs had a particularly noticeable effect on US consumers. American consumers were forced to face the brunt of the trade war’s effects as a result of these tariffs, which inexorably increased the cost of consumer products. On the other hand, the effect of the tariffs on China’s economy was apparent in a drop in export demand, which caused a significant slowdown in economic development. As a result, in the wake of these events, the future for the global economy remained unclear.
Reduction of the US/China Trade War
Phases of the US/China Trade Agreement
The two nations reached a historic deal consisting of two parts, suitably titled “Phase One” and “Phase Two,” despite rising tensions between the US and China. A variety of agreements were included in the first phase, which was successfully negotiated, with the goal of lowering trade imbalances and enhancing market access between the two countries. China specifically consented to adopt steps to protect American intellectual property as well as to buy a substantial number of goods from the US. After lengthy discussions, the second phase was finally agreed upon, and China made even more significant pledges to open its markets to American businesses and lower tariffs on US exports. In the sometimes acrimonious relationship between the US and China, these accords represented a crucial turning point.
US Tariff Rollbacks
The Phase One deal prompted the US to respond, and that response took the shape of a rollback in tariffs on imports from China. The rollbacks’ adoption helped to reduce economic tensions between the two countries because they were mostly targeted at certain electronics, clothing, and machinery. Both the US and Chinese economies saw a huge effect, with consumer prices sharply falling and exports surging, enhancing the overall economic picture of the two nations.
Chinese Tariff Rollbacks
The bilateral agreement, sometimes referred to as the Phase Two agreement, led to a fundamental change in China’s foreign policy. As a show of good faith, the Chinese government agreed to lower the tariffs imposed on a few US goods, particularly soybeans, pork, and cars. Such a little change in economic strategy turned out to be a wise move that benefited both countries in a mutually beneficial way. Significantly, this 180-degree turn allowed for a noticeable drop in consumer costs while also sparking a major increase in the export of commodities between the United States and China.
Conclusion
The lengthy trade dispute between the United States and China has had a profound impact on both countries’ economy and sent shockwaves throughout the world market. Consumers have been shocked by increased costs, and economic development has been muted on both sides of the Pacific as a result of the intricate network of tariffs and counter-tariffs that both economic behemoths have been using. Yet, there are beginning to be signs of hope as the two countries have signed a number of trade agreements to lower tariffs and boost exports. The two countries are placing their hopes in the chances of lowering tensions and resuming economic growth in the post-trade war period, even if the results of such joint efforts are yet not entirely clear.