United States and China increase tensions in trade conflict

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China and the United States are escalating action against one other due to trade disputes. The conflict, while not new, has intensified during Trump’s presidency due to allegations of unfair and exploitative trade. The recent actions have awakened fears of an impending trade war.

On March 9, Trump followed through on his promises to impose tariffs on steel imports. The tariffs taxed steel at 25 percent and aluminum at 10 percent. China called the tariffs a serious attack on international trade and threatened “firm action” if Chinese businesses were negatively impacted.

On April 2, Beijing imposed tariffs on U.S. imports worth about $3 billion. The tariffs taxed 120 products at 15 percent and another eight products at 25 percent, including pork and recycled aluminum. The next day, Trump threatened to strike back with a 25 percent tax on 1300 Chinese aerospace goods.

On April 4, China threatened retaliatory tariffs of 25 percent on U.S. products totaling around $50 billion. The products on the list include aircraft and automobile products, soybeans and chemicals.  They were approximately equivalent in value to the tariffs to which they were responding.

On April 5, Trump called for more tariffs worth around $100 billion, and China threatened further response. All of the tariffs threatened and imposed by China were specifically chosen in order to target products that may harm members of Trump’s base. They were aimed at states with Republican representatives in order to anger the base, which may pressure Trump to lessen tensions.

On April 9, Chinese President Xi JinPing renewed his pledge to reopen China’s markets for further trade and investment. He pledged to work to boost imports. The speech, while lacking any new claims or initiatives, was perceived as a conciliatory message in the escalating trade situation. Xi agreed to significantly lower import tariffs on vehicles, ease restrictions on foreign investment in auto and financial services and increase protection of intellectual property. The sentiment appeared to partially diffuse the situation, with Trump responding positively on Twitter.

The recent developments appear to indicate that the two countries navigated the trade conflict while avoiding a full-scale trade war.

Photo credits to Reuters / Damir Sagolj.

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