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THE TRADE WAR

FROM TRUMP TO BIDEN

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WHAT AM I TALKING ABOUT?

  • History - How was the relationship built
  • Underlying tensions - What factors led to a trade war
  • Trump - How did the trade war start and what were the consequences
  • Biden - What were the core policies
  • The Future - Trends for the future

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WHY DOES IT MATTER?

  • The People’s Republic of China has risen to become the second-largest economy worldwide

  • In 2023, China ranked as the fourth-largest U.S. goods trading partner, with total trade value reaching $575 billion.

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BACK TO THE PAST

  • 1949 - After the establishment of the PRC, trade between them and the US was virtually nonexistent

  • 1979 - The United States and China normalized relations as reforms under Deng Xiaoping opened China’s economy

  • 2001 - China became a member of the WTO

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UNDERLYING TENSIONS

  • National Security

  • Tech Race and the Role of PRC’s SOE’s

  • Loss of US Based Jobs

  • Currency Manipulation and Unfair Practices

  • Human Rights

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ENTER TRUMP

  • Capitalized on the issues surrounding US-China trade.

  • Rhetoric reflected sentiments within segments of the American electorate and government.

  • Start of a larger government effort in the US to counter perceived Chinese ambitions.

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ON THE OFFENSIVE

  • March 2018 - Trump declares a set of tariffs, totaling at least $50 billion on Chinese imports.

  • The PRC responds with tariffs of their own in a tit-for-tat exchange.

  • Meetings between the two countries would bear little fruit as tariffs increased throughout the year.

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ON THE OFFENSIVE PART 2

  • May 2019 - Following another breakdown of trade talks the Trump administration escalated tariffs from 105 to 25% on $200 billion worth of Chinese goods.

  • Simultaneously the U.S. Commerce Department added Huawei to its foreign entity blacklist, along with a ban on foreign-made telecommunications equipment.

  • August 2019 - China allows the yuan to weaken, leading the Trump administration to designate China as a currency manipulator. Along with the announcement of tariffs covering every product imported from China.

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PHASE ONE DEAL

  • Jan. 2020 - Phase One trade agreement is signed with a a series of concessions and commitments from both sides.
  • Some U.S. tariffs on Chinese imports were lowered.

  • China, pledged to purchase an additional $200 billion worth of American goods over the course of two years.

  • United States dropped its designation of China as a currency manipulator.

  • The deal still left most tariffs in place.

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A WRENCH IN THE WORKS

  • A few weeks later United States and China would became embroiled in a blame game regarding the origins of the COVID-19 virus

  • A series of other controversies would follow over issues such as the status of Hong Kong, press freedom, and national security.

  • Additionally, Trump attempted to solidify his legacy of being tough on China before leaving office. Utilizing more tough rhetoric and renewed restrictions on Chinese trade

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THE 2020 ELECTION

  • The heightened tensions led to hostility towards China becoming a central theme of the election campaign.

  • This shift was present in both the Republican and Democrat Parties.

  • By the time Trump had left office China was now viewed as the primary international threat to the US. With bipartisan support for anti-China policies in both Congress and public opinion.

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BIDEN AND THE NEW NORMAL

  • Biden's victory was widely perceived internationally as a signal of a return to a more predictable and traditional approach to U.S. behavior on the global stage.

  • With an expectation that Biden would depart from the confrontational trade policies pursued by Trump.

  • The hardline stance towards China established during the Trump administration would make any potential backtracking difficult.

  • The bipartisan consensus on the need to confront China meant that any tough stance on China would enjoy broad support.

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DIFFERENCES FROM TRUMP

  • President Biden's sanctions are characterized by a more organized and deliberate strategy.

  • The Biden administration has maintained all the tariffs inherited under Trump while implementing new restrictions.

  • Commitment to a "whole of government" approach.

  • Biden administration places more emphasis on coordinating its actions with allies.

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INITIAL YEARS

  • The Biden administration's NSS identifies the relationship between the United States and China as one of strategic competition.

  • The administration's trade approach emphasized the need for the United States to "out-compete" China.

  • Focus on working with allies and partners.

  • May 2021 - The first in-person meeting between top Biden administration officials and Chinese officials

  • Since then the US has steadily expanded sanctions targeting Chinese entities, with restrictions now extending to over 700 entities prohibited from purchasing from the US.

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UKRAINE AND TECH

  • Following investigations that Chinese companies were found to be supporting Russia’s invasion of Ukraine, the Biden administration has been increasingly adding third-party sanctions targeting entities within China.

  • Simultaneously, the US Commerce Department implemented sweeping restrictions on exports of US-made advanced computing chips and related equipment to China.

  • These measures highlight the Biden administration's efforts of using sanctions and tariffs on national security issues while addressing concerns with China.

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THE PRESENT AND FUTURE

  • Both US and Chinese tariffs show little signs of being rolled back.

  • The heightened pressure and banning of TikTok represents just another escalation.

  • Pressuring China now has emerged as a potent strategy for garnering support in national elections.

  • Biden's has announced the imposing of new tariffs totaling $18 billion only two weeks ago

  • Trump has also shown commitment to tariffs on Chinese goods, declaring that he would impose rates of 60% or higher if granted a second term.

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POSITIVE TRENDS AND FACTORS

  • Economic interdependence

  • Monetary benefit of trade

  • Ongoing thaw in tensions despite the increasing tariffs

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COMPETITIVE COEXISTENCE

  • Simultaneous competition and cooperation between the two nations.

  • Both sides are expected to maintain their longstanding trade relationship despite tariffs and sanctions

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CLOSING REMARKS

  • Despite differences in style and rhetoric, both administrations have underscored the need for strategic responses to China's actions.

  • The trade relationship between the US and China is continuing to grow despite sanctions.

  • Competitive Coexistence acknowledges that while the US and China may compete strategically on various fronts,, they also recognize the mutual benefits derived from their economic ties.

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Q&A

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SOURCES USED

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IMAGES USED

Getty Images

BBC

CNN�FOX�NPR�Statista

CFR

Vox