Is China Outmatched in Trump’s Trade War Against the US?

The yearlong trade disagreement between China and the United States continues to escalate. This may turn out to be an economic conflict that may exist for decades because both sides want global dominance, reputation, and wealth.

In 2018, the United States traded with China through goods and services for about $737.1 billion. Imports were $557.9 billion and exports were $179.3 billion. This meant the U.S. trade deficit (when a country imports more than it exports)with China was $378.6 billion.

In the week of May 6th, the hope of a trade agreement was almost extinguished, with both sides hardening their bargaining positions. Even if this issue is resolved, it may have little effect to end the tension between the two largest economies in the world.

China’s tactics used to get ahead of the United States in the global economy has caused the U.S. to become warier of China. These tactics include possession of high-tech companies located in the United States and Europe, state-sponsored hacking, subsidies to crucial industries, as well as discrimination to foreign companies.

President Donald J. Trump has prioritized reducing the U.S. trade deficit, which has existed for several years. A trade deficit occurs when a nation spends more money on imports than it receives from exports. Some other countries experiencing deficits include Australia, Brazil, Mexico, the United Kingdom, Turkey, and Spain. The Trump administration also is trying to limit China’s economic influence by warning about China’s ambitions.

The United States has limited Chinese investment in American companies, re-examined what technology can be exported to China, and encouraged other countries to stray from Chinese equipment. Over fears that Chinese researchers may be acquiring intellectual secrets in the United States, the F.B.I. has increased its scrutiny.

China has also been pushing back. The Communist Party’s People’s Daily newspaper stated, “The United States is again waving the club of tariffs after misjudging China’s strength, capacity, and will, further escalating trade friction between our two countries.”

One concern caused by the Trump administration is that discrimination against China could hurt the United States. This conflict could go on for decades. This is because the trade deal is part of a larger conflict.

On Monday, May 20th, China plans to raise tariffs on almost $60 billion worth of American goods. Some have urged the president of China, Xi Jinping, and the ruling Communist Party to take more extreme actions. This includes possibly boycotting American goods or selling United States Treasuries.

The Trump administration raised tariffs on $200 billion in exports. Also, it is planned they would move ahead on taxing another $300 billion worth of products. Hopefully, despite the years it will take, the U.S. and China settle on an agreement that will benefit both countries. This may not happen but all people can do is hope for the best.