Fueling concerns over U.S.-China economic imbalances and yet again questioning the relationship between both superpowers. August 2010, China Becomes World’s Second-Largest Economy. China and surpasses Japan as the world’s second-largest economy after it is valued at $1.33 trillion for the second quarter of 2010, slightly above Japan’s $1.28 trillion for that year. Which is a ridiculous amount of money and brings concern to the United States. China is on track to overtake the United States as the world’s number one economy by 2027, according to Goldman Sachs chief economist Jim O’Neill.
China’s success comes from the U.S. and all the help we’ve given them over the years for China to recover and deal with their issues. In an essay for Foreign Policy, U.S. Secretary of State Hillary Clinton outlines a U.S. pivot to Asia. Clinton’s call for increased investment”diplomatic, economic, strategic, and otherwise”in the Asia-Pacific region is seen as a move to counter China’s growing clout. U.S. President Barack Obama announces the United States and eight other nations have reached an agreement on the Trans-Pacific Partnership, a multinational free trade agreement.
The U.S. trade deficit with China rises from $273.1 billion in 2010 to an all-time high of $295.5 billion in 2011(U.S. Relations With China,Timeline). The increase accounts for three-quarters of the growth in the U.S. trade deficit for 2011. In March, the United States, the EU, and Japan file a request for consultations with China at the World Trade Organization over its restrictions on exporting rare earth metals. China is not happy with this and agreements about trade continue to grow. U.S. President Barack Obama hosts Chinese President Xi Jinping for a shirt-sleeves summit in a bid to build a personal rapport with his counterpart and ease tense U.S.-China relations. Obama and Xi also vow to establish a new model of relations, a nod to Xi’s concept of establishing a new type of great power relations for the United States and China.
February 9, 2017 Trump Affirms One China Policy After Raising Doubts. U.S. President Donald J. Trump says he will honor the One China policy in a call with Chinese President Xi Jinping. After winning the presidential election, Trump breaks with established practice by speaking on the telephone with Taiwanese President Tsai Ing-wen and questioning the U.S. commitment to its One China policy. March 22, 2018 Trump Tariffs Target China which now raises more concern. The Trump administration announces sweeping tariffs on Chinese imports, worth at least $50 billion, in response to what the White House alleges is Chinese theft of U.S. technology and intellectual property. Also putting tariffs on steel and aluminum imports, target goods including clothing, shoes, and electronics which restrict some Chinese investment in the United States.
July 6, 2018 the U.S.-China Trade War Escalates. The Trump administration imposes fresh tariffs totaling $34 billion worth of Chinese goods. More than eight hundred Chinese products in the industrial and transport sectors, as well as goods such as televisions and medical devices, will face a 25 percent import tax. China retaliates with its own tariffs on more than five hundred U.S. products. The reprisal, also valued around $34 billion, targets commodities such as beef, dairy, seafood, and soybeans. President Trump and members of his administration believe that China is ripping off the United States, taking advantage of free trade rules to the detriment of U.S. firms operating in China.
Beijing criticizes the Trump administration’s moves as trade bullying and cautions that tariffs could trigger global market unrest. When Donald Trump became US President he promised to “Make America Great Again”. Part of his plan is to radically change how US trade deals work and to focus on protecting the domestic economy. With these new protectionist policies, President Trump’s main goal is to reduce the flow of Chinese imports and push American consumers to buy domestically-made products. The president believes this is the best way to close the trade deficit between the US and China. Donald Trump’s trade war could potentially drag in products from other American trade partners, undermining relations.
This also risks a chain reaction as countries start clamping down on partners, which then retaliate(Palumbo, Daniele, 2018). Since 1992, China has played an extremely important role in the US trade. A full-blown trade war between the United States and China is likely to damage the economies of American allies such as South Korea, Japan and Taiwan because they supply the bulk of components and raw materials used in the exports targeted by Donald Trump. Escalation of the trade friction between the US and China would have a negative impact elsewhere too, as international trade, confidence and investment is hit at a sensitive time for the global economy, Louis Kuijs, the Hong Kong-based head of Asia research with Oxford Economics said.
Now that the China trade issue has had so much light shone on it and has caused bipartisan disquiet in the US, Trump and many in Congress seem determined to change organically the trade relationship between the two countries. It is hard to see how things can go back to business as usual or, if they do, that it will last long and too many Americans are aware of the issue now.
The Trump administration’s imposition of tariffs on imports from China has been criticised by many as being not the answer to the trade issues the two countries are trying to resolve. Yet few seem to know what the answer is. The two systems may, in fact, be, as Lighthizer told Congress in 2010, incompatible. If nothing else, Trump’s volume and bigmouth about US trade issues with China have focused the attention of many on the issue. How future trading between China and the US will take shape is one of the larger questions of our time.
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