Diving Into The US-China 'Trade War' 🔧

AFP / Getty Images

AFP / Getty Images

What's the beef?

During his presidential campaign, Trump vowed to fix China's "longtime abuse of the broken international system and unfair practices." In addition to the typical US allegations against China (that it is a currency manipulator and unfairly controls imports) the current conflict is also geopolitical about which ideologies will guide the world over the next decades (aka China v America).

Trade war not over

Despite allegations against China going back to the Bush senior era, no significant progress has been made by any president until Trump began increasing tariffs on Chinese imports. Last week, after months of seemingly positive progress towards a trade deal, Trump accused China of backtracking on their commitments and swiftly imposed an additional $200B in tariffs.


GOOD TRADE STRATEGY:

CNBC: What trade war? China stocks jump after tariff hike

CNN: China overplayed its hand with Trump on trade, and it could cost them dearly

Those who believe the latest developments are part of a broader trade strategy point to the fact that Asian markets “surged” 3-4% on Friday. Additionally, many sympathetic outlets point out that China “severely miscalculated” by assuming a stronger-than-reality negotiating position and underestimating how last-minute changes would “infuriate” Trump.

BAD TRADE WAR:

NY Times: Frustration Mounts Among Farmers as China Trade Talks Break Down & Opinion: Killing the Pax Americana

USA Today: Trump rattles analysts and investors with deleted tweets as China trade talks continue

Those who believe pursuing a trade war is bad tend to point out the “difficulties” faced by normal people on both sides, such as farmers in the US. They also highlight Trump’s deleted tweets to stoke fears that the administration doesn’t have a clear strategy out of the trade war.


Where's the common ground?

There is generally strong bipartisan support for a tougher stance towards China, which has continued with Democrat Chuck Schumer urging Trump to “hang tough on China.” However, despite the bipartisan political agreement, many scholarseconomists and think tanks strongly disagree that tariffs are the right approach and some question several of the allegations against China.

Not everyone's a trade expert

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