Let’s start with some tangential points, the differences between Chinese-style socialism and capitalism. From the mouths of the older generation, we heard that to get rich, you first needed to build roads. China’s infrastructure construction – these things are all funded by the state, and in a capitalist society, they would be contracted out. In remote areas, there’s no profit motive, so companies wouldn’t willingly take on those projects. Talking too much is getting off-topic, and ordinary people might feel that trade wars don’t have much impact on their lives. However, China’s high-end manufacturing has always been relatively weak. The IT industry I work in – memory, hard drives, CPUs, graphics cards – the core configuration of assembling a computer comes from factories abroad. These components account for 50% of the total cost, and high-end manufacturing is undoubtedly essential. The collision between China and the United States is inevitable.
References
Wikipedia
2018-2020 China–United States trade war (often referred to as the “China–United States trade war,” “US–China trade dispute,” “US–China trade friction,” or “US-China trade war”) was a trade war between the People’s Republic of China and the United States.
The trade dispute originated when U.S. President Donald Trump signed a memorandum on March 22, 2018, claiming that “China is stealing US intellectual property and trade secrets,” and under Section 301 of the Trade Act of 1974, imposing tariffs on goods imported from China totaling an estimated $600 billion. On July 6, 2018, the U.S. imposed additional tariffs of 25% on $340 billion worth of Chinese goods shipped to the United States. The Ministry of Commerce of China retaliated in kind with a 25% additional tariff on $340 billion worth of U.S. goods exported to China, including soybeans, the largest export product from the United States to China.
The two sides had temporarily reached an agreement to pause the trade war in May 2018 and issued a joint statement seeking reconciliation. However, the Office of the U.S. Trade Representative subsequently released its first list of tariffs on $500 billion worth of Chinese goods shipped to the United States on June 16, raising the existing 10% tariff to 25%. The China’s State Administration of Foreign Exchange (SAFE) then retaliated with equivalent measures, and the Ministry of Commerce of China also restarted anti-dumping investigations into various U.S. products exported to China. On July 6, the Trump administration formally implemented tariffs on the first list of $340 billion worth of Chinese goods shipped to the United States, marking the formal implementation of Trump’s trade policy towards China (the remaining $160 billion was subsequently added with a 25% tariff on August 23). The Ministry of Commerce of China stated afterward that “The United States violated WTO rules and launched the largest trade war in economic history.” The General Administration of Customs of China (GACC) indicated that China’s counter-measures were implemented immediately after the U.S. imposed tariffs.
On December 1, at the G20 Buenos Aires Summit, leaders Xi Jinping and Donald Trump agreed to hold a nine-month negotiation and suspend new trade measures during the negotiation period. After the deadline of March 1, 2019, the U.S. side announced significant progress and extended the suspension of new trade measures.
On May 5, 2019, U.S. President Donald Trump announced tariffs of 25% on approximately $200 billion, totaling $250 billion worth of Chinese goods shipped to the United States, which took effect on June 1. On May 13, the China’s State Administration of Foreign Exchange (SAFE) announced that tariffs on $600 billion worth of imported U.S. products would be raised to a range of 5% to 25%, starting from June 1. On June 1, the Office of the U.S. Trade Representative announced that the implementation date for tariffs of 25% on U.S. goods would be postponed to June 15, and SAFE stated that China’s tariff measures took effect as scheduled on June 1.
On June 29, leaders Xi Jinping and Trump held a meeting at the G20 Osaka Summit, agreeing to restart economic consultations, with the United States ceasing to impose new tariffs on Chinese products.
On August 1, due to concerns about China’s purchasing process of U.S. agricultural products, Trump announced on Twitter that tariffs of 10% would be imposed on the remaining $300 billion worth of all Chinese goods shipped to the United States starting September 1, 2019. On August 5, the Renminbi exchange rate against the US dollar fell below 7 yuan. The same day, the U.S. Treasury Department announced that China was designated as a currency manipulator. Subsequently, the Chinese government announced a suspension of purchases of U.S. agricultural products and announced tariffs of 10% or 5% on approximately $750 billion worth of U.S. goods, and resumed tariffs on U.S. automobiles and parts, while the U.S. side responded by increasing the tariff rates on its existing $300 billion Chinese goods to 15%, and its current $250 billion Chinese goods to 25% as retaliation, but these measures were subsequently shelved.
On January 16, 2