By Yujie Wang || Contributing Writer
Photo courtesy of Shutterstock.
On September 5th, the US and China announced a new round of trade talks in Washington in October. This is the 13th round of trade talks and the situation is not satisfying to either side.
The new talk may signal a positive progress of the two biggest economies to conciliate, but in which degree both sides will compromise is still vague. President Trump just officially carried out a further round of tariffs of 25 to 30 percent on 250 billion dollars of Chinese imports. This measure is a sanction against China’s new retaliation on $78 billion US goods on August 23th. The rest of the 300 billion dollar imports from China will also be charged 15 percent, increased 5 percent point, announced on September 1st.
The trade war has been in motion for more than one year and does not show signs of stopping during the Trump presidency. It started in 2018 by the first move of US charging particular tariffs on Chinese imports. According to the timeline provided by China Briefing News, The US Customs and Border Protection (CBP) began collecting a 25 percent tariff on 818 imported Chinese products valued at US$34 billion – giving effect to the first round of tariffs, which were revised and announced on June 15, 2018. In the next month, the US kept placing trade penalties over Chinese products. This series of measures corresponded to the talk President Trump had in March 2018. Trump said the tariffs would be imposed due to Chinese theft of U.S intellectual property. Trump said his planned tariffs on Chinese imports would make the United States “a much stronger, much richer nation.” The official sanctions made some sort of trade war inevitable and China retaliated quickly. China’s Ministry of Commerce announced a reciprocal 25 percent additional tariff on US$16 billion of US exports to China, effective August 23, 2018. This was the beginning of the rounds and rounds of economic penalties taken by the two largest economies in the world.
China, as the same time, filed a complaint with the World Trade Organization (WTO) claiming that the US’s pertinent regulations damaging the Chinese’s trade benefits and international economic environment. The WTO ultimately failed to carry out any substantial improvements or make conciliation between the two sides so the war has continued. In the later half of 2018, there were a couple of rounds of US-China trade talks arranged to solve the serious trade problems, which had already influenced negatively in the global community. However, not once have the two sides managed to have a long-term agreement.
On December 1, 2018, the US and China agreed to a temporary truce to de-escalate trade tensions, following a working dinner at the G20 Summit in Buenos Aires. According to the agreement, both the US and China will refrain from increasing tariffs or imposing new tariffs for 90 days (until March 1, 2019), as the two sides work towards a larger trade deal. This was a temporary truce and was the first time two countries showed a gesture to make a deal. However, as we know at present, the trade talk failed. When the US Department of Commerce announced the addition of Huawei Technologies Co. Ltd and its affiliates on its “entity list,’ which effectively bans US companies from selling to the Chinese telecommunications company without US government approval in May 16, 2019. The Huawei company has been seen as one of the most hi-tech companies in China.This announcement no doubt aroused hostile emotion in China against the US and escalated the level of trade war not economically but also popularly. In August, the Chinese currency (RMB) is officially devalued into 7 per US dollar – it’s lowest in 11 years. It is a responding measure to drop its goods’ prices, which is quite efficient.
Now in September 2019, the 13th round of trade talks is scheduled for October and the tension between the US and China has not been mitigated. This war is seen as a battle for who will be the most powerful and influential economy in the next decade. Whether the two nations can make a deal on the bargaining table or let the fight continue damaging both countries’ commercial relations is yet to be seen.
Senior Yujie Wang is a contributing writer. Her email is ywang7@fandm.edu.