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President Trump and Chinese President Xi Jinping outside the Great Hall of the People in Beijing. (Artyom Ivanov / Tass through Getty Images)
With all the recent hostilities, it is easy to forget that China and the United States have been the main trading partners for years. , with nearly $ 500 billion in total imports and exports, or about 15% of total US trade. The United States, on the other hand, has been China's largest trading partner since the 1990s, surpassing Hong Kong as the largest importer of Chinese goods in 1998.
Trade relations between the two economic powers have not been the main source of trade. have not always been fluids are set to change drastically on Friday when the proposed tariffs of Washington and Beijing are expected to come into effect. The United States will levy $ 34 billion worth of Chinese goods from Friday, and Beijing is committed to retaliating with tariffs equal to US exports, which could mark the beginning of a new era. a growing trade war. If President Trump's May and June Threats Should Be Taken Seriously, Nearly One-Third of Chinese Imports into the United States Could Be Affected by Tariffs in the Months to Come
. "Said Mary Lovely, a non-resident senior fellow at the Peterson Institute for International Economics and Professor of Economics at Syracuse University. What will happen on Friday" will represent a retreat fundamental to the leader of the world trading system, "she said, adding," This will be considered a turning point. "
Even as a candidate, Trump made it clear that he foresaw significant renegotiation of relations In a speech 2015 announcing his candidacy, Trump mentioned China 21 times, saying that they were taking American jobs and "tearing up" the US economy. campaign, he committed himself to correcting the growing trade deficit between the two countries by imposing high taxes, even if, for a period, it looked more like hard speeches than to the action. Both countries have become well "fun bluff," said Mr. Lovely. Friday, the endless threat of tariffs will become a reality. When they come into effect, analysts will say that they will start inflicting significant economic damage not only in the United States and China, but also in global markets.
For anyone who wants to know how this has become a "red code" situation, Lovely describes, here's an overview of the major events:
Jan. 22 – Trump imposes new tax on solar panels – a key export to China
In its first major commercial move of the year, Trump introduces tariffs on solar panels and washing machines . For solar panels, the tax will start at 30% the first year before falling to half that over four years. The decision was not well received by China, which produces 65% of the world's solar modules.
[The first layoffs from Trump’s tariffs are here]
March 1 – Trump raises duties on imports of steel and aluminum
After months of threats, Trump raises import taxes on the goods. steel and aluminum by 25% and 10% respectively. While only 6% of these US imports come from China, the country reacts with a stern warning: A Chinese spokesperson says at a press conference that Beijing "will take appropriate measures to safeguard its rights and legitimate interests ".
April 2 to 6 – China proposes tariffs against the United States, causing a significant rise in tension
On April 2, China imposes tariffs of 2.4 billions of US dollars. This list of 128 goods rivals the $ 2.7 billion of Chinese steel and aluminum imports that the Trump administration decided to impose in March. The list also targets agricultural products such as pork, which would disproportionately affect US farmers.
The Trump administration retaliated on April 3 by unveiling a list of [1 300 000] Chinese products that could be subject to 25% tariffs. The list, which has a value of about $ 50 billion, includes products such as semiconductors, medical devices and flat-screen TVs. These are almost all examples of the type of sophisticated technology that China is aiming for through its "Made in China 2025" plan.
On April 4, China responds to US tariffs by producing its own list of 106 US products, including soy beans, cars and airplanes, which could be subject to 25% tariffs.
A day later, Trump orders his chief trade negotiator, Robert E. Lighthizer to consider increasing customs duties to $ 100 billion worth of imports. Chinese, but without confirming new rights. The Chinese Ministry of Commerce said the next morning that China would fight Trump's proposed tariffs "at all costs".
April 16 – U.S. Commerce Department Bans Exports to Chinese Telecommunications Company ZTE
United States Applies Seven-Year Export Prohibition to Chinese Telecommunications Company ZTE After Learning That it Does not Respect the rules of a previous settlement agreement.
The company was first penalized in May 2017 for illegally exporting US goods to North Korea and Iran, in violation of trade sanctions. He agreed to a settlement with the United States, which required them to pay $ 1.19 billion in fines and to punish employees involved in the violation of sanctions. After learning that ZTE had not actually punished the people involved, the Commerce Department said it would prohibit all US companies from selling key parts such as chips to the company.
A ZTE research and development center in Beijing on June 13, 2018. (Jason Lee / Reuters)
May 13 – In a flip-flop, Trump tweets that the United States will help revive ZTE
In early May, ZTE announced its intention to " cease its major activities" because of the financial losses caused by the US ban.
In response, Trump tweets on May 13 that he is working with Chinese President Xi Jinping hands ZTE over to business. "Too many jobs have been lost in China, the Commerce Department has been instructed to do it!" he says.
Reports indicate that the Trump administration was working to obtain China's trade concessions in exchange for the help of ZTE, but the abrupt change of position of Trump still surprises the sales consultants. Some national security officials are also concerned that the sale of US technology to ZTE could pose a threat to cybersecurity.
"America's national security should not be used as a bargaining chip in trade negotiations", Democratic senators wrote in a letter to Trump . "Offering to negotiate the enforcement of US sanctions to promote jobs in China is clearly a bad deal for American workers and for the safety of all Americans."
[A trade war with China could hit these communities hardest]
June 7 – The Trump administration softens ZTE
Less than a month after its entry into force, the seven-year ban on selling US goods to ZTE comes to an end . Commerce Secretary Wilbur Ross told CNBC that instead of the ban, the company will pay a fine of $ 1 billion and will host a new compliance team consisting of the following: American experts.
June 15 – Trump announces a 25% tariff on $ 50 billion worth of Chinese goods. China reacts with targeted retaliation
Three weeks after saying that the proposed tariffs were "pending", the Trump administration publishes an updated list of 1100 Chinese products that will be subject to a 25 percent tax. Government threats, formulated for the first time in April, will be updated as of Friday, 6 July.
More than 90% of the goods on this list are intermediate inputs or capital goods, which means that they are items imported by US companies to assemble finished products. In other words, the tariffs that will come into effect will negatively affect US businesses and raise prices for US consumers warn experts at the Peterson Institute.
June 18 – Trump threatens to impose duties on additional $ 200 billion of Chinese goods
Trump says in a statement that the United States is in the process to draw up a list of Chinese products of 10 percent unless China accepts the commercial concessions established by its administration. If it was implemented, it would add an additional $ 200 billion in import taxes for the country, which means that almost all of the $ 505 billion worth of Chinese products imported into the United States would be subject to customs duties. As David Lynch and Heather Long of the Post point out, "[s] a step would be virtually unprecedented in the history of the United States."
The Chinese Ministry of Commerce responds by qualifying the "Blackmail" of Trump. the Senate backtracked on Trump's ZTE decision voting 85 to 10 to reinstate the ban on the sale of US components to the company. and the Chinese Flags are in place before a press conference by US Secretary of State Mike Pompeo and Chinese Foreign Minister Wang Yi at the Great Hall of the People in Beijing on June 14, 2018. (Jason Lee / Reuters) [19659066] June 27 – Trump calls on Congress to "improve" the process of reviewing Chinese investments in American technology
End of June, reports [19659012] emerged that the Trump administration was planning to prevent Chinese companies from investing in American technology. The government has stopped doing exactly that, announcing instead that it would work with Congress to strengthen the regulation regarding foreign investment.
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