The US-China trade war: a simpler breakdown of the story so far

Amidst the sea of news and updates on the US-China trade war, here's a short breakdown of the scenario thus far.

The US-China trade war refers to the ongoing trade conflict between the United States of America and China since 2017. Once China gained membership into the World Trade Organisation (WTO) in 2001, it steadily became the US’ largest trading partner with a trade surplus worth USD$375.6B (2017) (“What is the US-China Trade War?”). While the Bush and Obama administrations opposed this growing build up, their actions to remedy the same largely revolved around antidumping investigations and tariffs- but not for too long. These winds changed in 2016, as Trump advocated for a highly protectionist stance to retain American jobs. This stance maintained that China’s trading practices were unfair and built upon a manipulated yuan, intellectual property (IP) theft and technology transfers to its government. On the flip side, China would maintain the viewpoint that the US had aimed to block its economic growth. Over April 2017, Presidents Trump and Xi attempted to resolve the dispute via a 100 day plan and opening up key markets. Following the failure of this plan in July, President Trump issued an investigation into China’s steel industry and alleged IP theft (Wong and Koty, “The US-China Trade War: A Timeline”). This culminated in December, with Trump alleging that China’s goals were “antithetical to the interests and values of U.S”, and 6 promising aggression against any unfair trade practices (ISDP, “Snapshot of the US-China Trade War”) . The trade war officially started in January 2018. The Phase One deal brought many exemptions on tariffs throughout 2020, as demonstrated in the timeline below. Nonetheless with the stance of global protectionism that has accompanied Covid-19 in recent years, countries only achieved 58% of the targets for US exports to China by 2020 (Bown, “US-China phase one tracker: China’s purchases of US goods”) . This was widely considered as a measure of the ineffectiveness of the deal. As of now, the situation remains in a limbo as Biden has not removed any tariffs and plans to take action after diplomatic talks with the US’ trade partners. China has called on Biden to remove sanctions in a bid to improve Sino-American relations.

Figure 1: Trade War Timeline (Sources: Durkin, “US-China Trade War Timeline”; ISDP; Bown)