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The Chinese Automobile Industry was affected by last week's US rates
After the entry into force of US duties on $ 34 billion (25.7 billion pounds sterling) of Chinese goods last week, China is largely on President Trump's firing line. Pipeline and President Trump ordered the administration to prepare to collect duties on £ 200 billion of Chinese trade on top of that.
China's trade policy is unfair, he argues, and it steals the technology of American companies.
Trump's position is shared by his commercial advisor Peter Navarro, who co-authored a book, Death by China, which has also been turned into a documentary film. Navarro warns of threat he thinks China weighs on US interests
The naked figures of China's rise to power are certainly striking.
The country exports nearly seven times more than in the beginning The 21st Century
It is the largest exporter of goods in the world, worth more than $ 2tn a year.
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Trump accuses China of behaving unjustly comes to global commerce
But it is also a leading market for other countries. China ranks second as an importer of goods and services.
However, China makes more of the first – exporter – than important. There is a significant imbalance in its trade with the rest of the world.
Using a somewhat broader measure, called the current account of the balance of payments, which includes trade, China had a surplus of $ 165 billion last year.
It's big, but it's not the biggest. Germany and Japan have bigger surpluses, and President Trump also has problems with them
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In fact, China's surplus halved compared with 2008. If you focus on the percentage surplus of national income or GDP, the decline is even more marked – from only 10% in 2008 to 1.4% in 2017. By this measure, it is now a rather moderate imbalance.
The United States, on the other hand, has a trade deficit with the rest of the world, up to $ 800 billion last year for merchandise trade. These imbalances are much smaller if we include trade in services (such as finance, business services and travel) where the United States is the world's largest exporter, although President Trump has tend to forget that. It tends to focus specifically on the trade of goods.
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China has already retaliated against tariffs on US exports, including including lobsters
This is a subject of debate about the importance of these imbalances, and they are the result of countries' trade policies.
Most economists will tell you that a country's overall trade balance is the result of savings and investment from businesses and households, and tax and income policies. government expenditures;
A country that spends more than it will produce will have a trade deficit, like the United States.
Whoever earns more than what he spends will have a surplus. China, with very high levels of household savings, is one example.
This does not mean that government policies are not a factor. Tax and expenditure policies, interest rates, exchange rate policies and labor market policies can all affect saving and investment as well as the trade balance.
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Chinese Tractors were Also Affected by US Tariffs
But, according to most economists, this is not the case, fundamentally motivated by trade policies.
It must be said that it is counterintuitive, and this is not a view shared by President Trump. It tends to see the imbalance as a result of China's trade and other policies, including subsidies, currency manipulation and the acquisition of technology from other countries.
His administration was particularly critical of the "Made in China 2025" initiative, in which Beijing wants to strengthen the country's position in a number of key sectors of the industry, including pharmaceuticals, planes and robotics. The US Trade Representative has described it as part of a plan to "conquer the economic dominance of some advanced technology sectors."
What is indisputable, it is the giant economic presence of China.
There was a key moment in the rise of China at the beginning of the present century, when she joined the World Trade Organization.
This means that China's access to overseas markets – such as the tariff levels it was faced with – was protected by the WTO rules.
President Trump believes that it was a mistake, that there was a missed opportunity to force China to open its own markets.
A 2017 report from the US Trade Representative writes: "It seems clear that the United States has erred in supporting China's entry into the WTO on terms that have proven ineffective to ensure the opening of China to the market. trade regime. "
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The US is now retaliating, with last week's tariffs, and this week's announcements , coming after existing levies on
With respect to these two metals, there is an excess world capacity which reflects, at least in part, Chinese investment.
Since the beginning of the century, the production China's steel has risen fold, although it has declined slightly in recent years.China's aluminum production grew even faster.
State concerns United States about China's metal production and Beijing's approach to foreign technology acquisition are shared by a number of other major trading powers, including the European Union and also by the previous US administrations.
The EU has often urged China to attack what it regards as its excess capacity of steel and aluminum and has complained to WTO issues of similar intellectual property and technology.
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The United States has long accused China of keeping the yuan artificially undervalued
George Magnus, from China's Center at Oxford University, says that President Trump has a point in relation to China's industrial and trade policies.
Foreign companies wishing to operate in China must work with a Chinese partner This means that they can easily lose control of their technology.
He highlights China's progress in high-speed trains and electric vehicles.
When the EU and other members of President Trump is in his enthusiasm to unilaterally impose additional trade barriers on China. Needless to say, they are even less enthusiastic about the prices of steel and aluminum, which are also hitting American allies.
Another allegation often made against China is that of manipulating its exchange rate to gain a competitive advantage. A cheaper currency allows a country to sell its goods abroad more easily.
This was a more widespread concern over the past decade, but the Chinese currency has since risen, depriving some of that competitive advantage.
That said, it is a weapon that China could possibly use to continue to meet US tariffs on its products.
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