The United States and China have long had a contentious relationship. This relationship dates back to the rise of Communism within China under Mao Zedong and into the cold war. Throughout the cold war flash points such as the Korean War and Nixon’s historic visit to China have represented varying relationship temperature levels between the two powers. While China struggled economically throughout much of the 20th century, the relatively recent opening up of the Chinese economy has made the nation the fastest growing economy in the world. China’s rapid expansion greatly effected the relationship it had with the United States. As China became a major trade partner of the United States for imports and exports a like, trade practices of China began to raise eyebrows. China has long been accused of intellectual property theft against American companies and the American government. Everything from trade secrets, patents, information about secret military programs, and other important information has been stolen by the Chinese as a result of factories and other business practices being handled within China. The total loss of U.S. companies and the government is estimated to be $300 billion dollars worth of profit annually. Additionally, many including U.S President Trump have also made the case that China has been unfair in its dealings with the United States and that this has resulted in an unfair trade deficit. The current deficit between the U.S and China in trade is $375 billion in favor of China. Thus, the claims of unequal trade practices may be warranted.
All of these accusations and tensions have resulted in what is now being called a “Trade War” between China and Trump. This all began with the U.S. governments directive to investigate Chinese trade practices in 2017 and then the first set of tariffs hitting on solar panels and washing machines in 2018. Since then the trade conflict has ballooned as stakes have gotten higher and tariffs have sky rocketed. Currently the United States has slammed China with nearly $300 Billion in tariffs on a wide range of products. China has responded with a slightly lower amount of tariffs in the range of $200 billion. While the effects of this trade war are only starting to be felt, the issue of the economic and international relation fallout has become a hotly debated issue in the United States.
Typically proponents of the trade war believe that it is advantageous because the U.S. can force China into better trade for the U.S. and win the war. This would be done by slowly crippling the Chinese economy by making it more and more expensive to send goods to the United States. This idea is called a tariff and forces foreign governments to pay to import certain things. This practice turns into a war when the nation slammed with tariffs places tariffs back against the other nation. Essentially, the war boils down to which economy can withstand the profit hit more. Opponents of the trade war very strongly believe that the hit to local businesses including agriculture would be too high of a price to pay in the long run for any gains in trade agreements. Different still, many believe that this trade war is a draw or worse a lose, lose situation for each country. While in the 1960’s the global economy accounted for less than 30% of the American economy, today it represents close to 60% of the total American economy. Thus, many argue that continue the continued trade war would not only hurt China and the United States, but potentially the worlds economy as a whole.
Despite opinions, current indicators show that China is, in fact hurting more than the United States is as a result of the trade war. Although recent stock market slides and a downturn in Agriculture exports has sparked concern, the desired effect on crippling China is occurring. While the U.S. stock market is down 3% the Chinese stock market for the year was down over 20%. The current trade standings go to show the truth to the statement: “if we cannot trade with China, we sneeze. If China cannot trade with us, they catch pneumonia.” While the risks are still incredibly high for both countries, Trump is not backing down any time soon it appears. So far, Trump has gone through on all threats to China and seemingly has leverage in the trade battle at the moment. While many will be hurt by these actions and opinions will continue to be very divided, the trade war appears to be primed to continue until one nation blinks in front of the other. For Trump this means public opinion of the trade war will be crucial. Currently 34% of Americans are concerned about the continued trade policy between Trump and China. If this number continues to rise and debate continues to intensify the war may be over sooner rather than later.