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Tracking The Roots Of The U.S.-China Trade War

The trade war between the U.S. and China has become one of the major stories of the Administration of President Trump with many financial experts worrying the battle over tariffs could damage the global economy. Relations between the Obama Administration and China’s President Xi Jinping had been cordial with the two biggest economies n the world looking to limit the tensions between them. However, the emergence of President Trump as a leading contender for The White House in 2016 undoubtedly marked the start of the tension that led to the current impasse between the economies.

October 2019 will mark the start of another round of talks between the U.S. and China as the two nations try to find a way out fo the current problems that date back as far as 2016. The accepted start of the trade war is usually described as the arrival of then-candidate Donald Trump on the campaign trail for the Presidency of the United States. As early as June 28, 2019, Trump began his attacks on China by claiming the Chinese had committed the greatest jobs theft in the history of the modern world. The then-candidate for the Presidency continued to lay down his plan for ending Chinese dominance of the global economy by introducing new tariffs on Chinese-made goods imported into the U.S.

At the end of March 2017, Trump had ascended to the Presidency but had continued his attacks on the Chinese trade policy and its place in the global economy. March 31, 2017, was the start of the trade war in real terms with the Trump Administration starting reviews of the tariffs already in place and the relationship between the two countries. At this time, the trade deficit of the U.S. became headline news with the decision to bring about a change in the way the U.S. completed its trade options explored in the review ordered by President Trump.

Over the Summer and Fall of 2017, the President continued his attacks on Chinese traders despite engaging in talks at his Mar-A-Lago estate with his Chinese counterpart. At this point, the Trump Administration began singling out the Chinese for the role they played in various acts including the theft of intellectual property from U.S. companies. August 14, 2017, brought about the first direct attempts to challenge Beijing by the Trump Administration as an investigation into the theft of intellectual property by suspected Chinese agencies brought about the first significant acts of the trade war.

Despite the focus being placed on the goods imported to the U.S. from China, the majority of tariffs introduced over the course of 2018 are placed on similar goods imported from around the world. For example, the U.S.-China trade war was described as starting with U.S.-imposed tariffs on washing machines and solar panels imported from China. However, this measure and those imposed on steel and aluminum were imposed on all suppliers regardless of their home nation. In response, China went on to impose a 25 percent tariff on 128 products created by U.S. suppliers to respond to the charges imposed by the U.S. government.

By April 2018, the U.S. imposed 25 percent tariffs on around $50 billion in Chinese goods followed a day later by similar tariffs imposed in Beijing as retaliation. The back and forth of the tariffs being imposed continued until July 2018 when the U.S. began imposing large tariffs of around 25 percent of Chinese goods of around $45 billion before major increase inaction led to the imposing of tariffs on $200 billion in Chinese goods by July 2018. By December of the same year, U.S. tariffs were being imposed on hundreds of billions in goods from China as Beijing countered with lower tariff levels on around $30 billion in products.

The continuing tariff issues led to the Chinese Government removing itself from all aspects of the trade agreement that had been agreed with the U.S. amid rising tensions. President Trump had once again threatened to raise the 10 percent tariffs he had left as an open-ended option for his Administration leaving Beijing unhappy with the future of their trade with the U.S. The latest round of talks opening in October 2019 provides the latest chance for the trade war to be ended.

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