International Environment & Geopolitics
China-U.S trade war
Historic relations and world positions
From the 19th century U.S and China relations have grown an international rivalry.
The United States and China have been in trade conflicts since China's economic increase
brought the country back to global prominence 40 years ago.
Over that period China increased in productivity and wages that have allowed the country
to become the world’s second-largest economy after the US and domine in manufacturing
and export, it has a absolute advantage over these fields. Nowadays there are the two
biggest economies in the world competing against each other for the dominance and
power one.
Recently a trade war has started again between China and the US.
Issues
In 2016, even before his presidential election, Donald Trump promised to make trade fairer
for the US government and thought investigated Chinese trade policies in order to start
immediatly imposing tariffs on Chinese products
Mr Trump who stands for a mercantilist idealist ideology, aims to secure the interest of its
country and encourage American consumers to buy American products. Independence
and survival of the country depend on accumulation of sufficient power in order to protect
and serve their interests.
China though combines marxism and traditional values.
So far, the US has imposed three rounds of tariffs on Chinese goods, for a total of more
than $250 billion. They cover a wide range of consumer and industrial items including
handbags, rice and railway equipment.
The taxes will increase from 10% to 25%. Donald Trump has threatened to hit another
$267bn worth of goods.
Besides all Chinese imports will be subject to tariffs.
The US has also put tariffs on worldwide imports of goods like steel and washing
machines, which further affects products from China.
China has struck back. It's accused the US of starting "the largest trade war in economic
history" and imposed tariffs on $110 billion worth of American goods.
Us tariffs on Chinese imports will hurt the US workers mainly.
But it will also affect other international sectors and companies such as automobile, food
and so on.
China's aggressive campaign to build more sophisticated manufacturing industries is one
of the US government's main complaint in the trade war.
The Trump administration has accused China of using unfair practices, such as intellectual
property theft, to get hold of American tech secrets
The deteriorating relations with the United States may rise China’s economy even more as
it pushes them to develop more by becoming more self sufficient and may prompt to step
up cooperation on advanced technology with Japan, South Korea, Israel and European
countries.
Both countries have different ideologies and compete for power which creates many
tensions at political and economical levels.
It will be difficult in that case to find a agreement as the US would consider a war to defend
its interests. Even though China agreed on buying US products, conflicts remain over
power.
drawbacks pointed out :
The International Monetary Fund has warned a trade war between the US and China risks
making the world a "poorer and more dangerous place" in its latest assessment of the
global economy.
recommendations for companies :
Businesses should become more effective in using investment policies with their home
governments and in developing and executing their own foreign policies.
