Never Ending Trade War between the U.S. and China written by 20111 Park Hye-in, 20115 Lee Yu Kyung

Since the inauguration of the Donald Trump administration in 2017, the world, mainly the United States, has been drastically changing its trading system from free trade to new-protectionist trade, especially targeting their economic obstacle, China.

 

New-protectionist trade is a newly emerging trading system caused by the oil crisis of the 1970s and the global economic downturn.

 

New protectionism trade aims to reduce unemployment in the country, ease the gap in competitiveness in some industries caused by rapid industrialization of emerging industrialized countries, and deepen trade friction caused by trade imbalances among advanced economies.

 

Trade War in 2018
 

The trade war between the U.S. and China was a very bold and extremely divisive period.

 

The U.S. Trade Representative (USTR) submitted a report to the president in March stating that China's industrial policies violated the U.S. trade laws by transferring or stealing intellectual property and advanced technologies, and President Trump announced a tariff policy on Chinese goods on March 22^nd.

 

The U.S. and China have imposed tariffs three times since July 6^th. The U.S. imposed tariffs on imports worth $250 billion and China's $110 billion. China decided to impose tariffs on U.S. agricultural goods.

 

President Trump said that if China impose tariffs on U.S. agricultural products, they would impose additional tariffs on imports of $267 billion.

 

In August, President Trump ordered the USTR to investigate China's unfair trade practices and violation of intellectual property rights.

 

Trade War in 2019
 

Vice-ministerial trade delegations from the U.S. and China conducted their first trade negotiations in Beijing during the trade war truce from January 7^th to 9^th. There was no tangible progress made between the two countries at the time, but it was meaningful in that it was the first negotiation since the highly developed trade war cease-fire.

 

The situation, however, worsened again as bilateral trade talks broke down during the May 9^th to 10^th meeting.

 

The U.S. called for in agreement on the legislation that addressed the structural problems such as insufficient measures to protect intellectual property rights in China, forced technology transfers and excessive state subsidies, but China countered by stating that this was a violation of its sovereignty.

 

In addition, the U.S. President signed an executive order on May 15^th to secure a supply network of information and communication technologies and services that would prevent U.S. companies from using foreign-made equipment that threaten national security.

 

Although the executive order did not specify a specific country or a specific company, it is widely believed that Chinese telecommunication equipment manufacturer Huawei is the main target. The U.S. suspects Huawei could be abused for spying by the Chinese government by planting back doors in 5G equipment, citing this as the reason for Huawei's sanctions.

 

Chinese President Xi Jinping inspected a rare earth producer on May 20^th. China's state media reported that China could use rare earth supply cards in its trade dispute with the U.S. China uses rare earths as political weapons, such as banning exports of rare earths to its trading war partners.

Political Sanctions Between U.S. and China

 

The U.S.-China trade war did not end in an attack through economic policies between the two countries. The trade war between the U.S. and China has even affected their diplomatic relationship and ties. Consequently, this leads to the fact that they touch on sensitive issues in each other’s country.

 

U. S. Supports Taiwan as a Country

 

Recently, the U.S. decided to sell 66 F-16V jets, the latest F-16 fighter jets, to Taiwan. This fact is important in the relationship with China, because China has considered Taiwan as part of China.

 

For China, the U.S. selling the supporting weapon to Taiwan indicates the serious interference in domestic affairs.

 

However, the U.S. has exported various weapons to help Taiwan maintain its essential defense capabilities. Before Trump’s administration, the U.S. arms exports to Taiwan were carried out in a very cautious manner.

 

However, the Trump administration is actively supporting Taiwan.

 

Furthermore, in the June 1^st Indo-Pacific Strategic Report by the U.S. Department of Defense stated Taiwan as a country contributing to the U.S. mission. This is a shift from One-China policy that the U.S. has so far acknowledged and effectively recognizes Taiwan as an independent nation.

 

The stance of U.S. and China on this policy can result in seriously tangled relationship between two countries.

 

A Strong Intervention in the Hong Kong Situation

 

The United States is committed to a strong intervention in relations between China and Taiwan, as well as China and Hong Kong, which has recently emerged again.

 

In a statement marking the 30^th anniversary of the Tiananmen incident on June 3^rd, U.S. Secretary of State Mike Pompeo said, “On June 4^th, 1989, the leadership of the Chinese Communist Party sent tanks to Tiananmen Square to violently suppress democracy, human rights and peaceful protests.”

 

Chinese foreign ministry spokesman Geng Shuang responded to this at the June 4^th press briefing by addressing Secretary Pompeo criticism of the Chinese political system, as well as stating that this was a “serious interference in domestic affairs.”

 

In addition, he said, "This is against international norms and hurts mutual trust”.

 Cease-Fire?

 

Despite the strikes, the two countries are in a truce. Officially, the two leaders entered the first phase of a ceasefire at the G20 summit in Argentina on December 1^st, 2018, promising to find an agreement.

 

The two countries also negotiated again at the G20 summit in Osaka, Japan, on June 29^th, 2019.

 

However, the U.S.-China trade war continued with the Trump administration imposing 10 percent additional tariffs on Chinese products in September.

 

Both the U.S. and China are trying to find their rationality and ease ties as the global economy shows signs of faltering due to recent trade disputes, and the trade dispute between the U.S. and China is expected to end completely in the coming years.