2018 China-USA Trade War

The 2018 China–United States trade war began after U.S. President Donald Trump announced, on 22 March 2018, an intention to impose tariffs of US$50 billion on Chinese goods under Section 301 of the Trade Act of 1974, citing a history of "unfair trade practices" and theft of intellectual property. In retaliation, the Chinese government imposed tariffs of its own on over 128 U.S. products, including most notably soybeans, a major U.S. export to China.

Tariff Announcements

U.S. President Donald Trump signed a memorandum on 22 March 2018 under Section 301 of the Trade Act of 1974, instructing the United States Trade Representative (USTR) to apply tariffs of US$50 billion on Chinese goods. In a formal statement, as required by the section, Trump said that the proposed tariffs were "a response to the unfair trade practices of China over the years", including theft of U.S. intellectual property. On 2 April, the Chinese Ministry of Commerce imposed tariffs on 128 U.S. products including aluminium scraps, airplanes, automobiles, pork products, and soybeans (which have a 25% tariff), as well as fruits, nuts, and steel piping (15%). The next day, the USTR published a list of over 1,300 categories of Chinese imports worth $50 billion on which it planned to impose levies, including aircraft parts, batteries, flat-panel televisions, medical devices, satellites, and weapons. In retaliation for that announcement, China imposed an additional 25% tariffs on airplanes, automobiles, and soybeans, which are the top U.S. agricultural export to China. On 5 April, Trump directed the USTR to consider $100 billion in additional tariffs.

Trump has denied that the dispute is a trade war, having stated on Twitter in April 2018, "that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.", and adding that "now we have a Trade Deficit of $500 billion a year, with Intellectual Property Theft of another $300 billion. We cannot let this continue." U.S. commerce secretary Wilbur Ross stated in a CNBC interview that the planned Chinese tariffs only reflected 0.3% of U.S. gross domestic product, while press secretary Sarah Huckabee Sanders stated that the moves would have "short-term pain" but bring "long-term success".

In May, China canceled orders of American soybeans. On 20 May, Treasury Secretary Steven Mnuchin, in an interview on Fox News Sunday said that, "We are putting the trade war on hold". The White House announced on 29 May that it will impose a 25% tariff on $50 billion of Chinese goods with "industrially significant technology;" the full list of products affected to be announced by 15 June, and the tariffs will be implemented "shortly thereafter". The White House also says it will announce and impose investment restrictions and enhanced export controls on Chinese individuals and organizations to prevent them from acquiring U.S. technology, to be announced by 30 June, and be implemented "shortly thereafter." The BBC reported on 3 June that China had "warned that all trade talks between Beijing and Washington will be void if the U.S. sets up trade sanctions."

On 15 June, Trump declared in a short White House statement that the United States would impose a 25% tariff on $50 billion of Chinese exports. $34 billion would start 6 July, with a further $16 billion to begin at a later date. China's Commerce Ministry accused the United States of launching a trade war and said China would respond in kind with similar tariffs for US imports, starting on 6 July. Three days later, the White House declared that the United States would impose additional 10% tariffs on another $200 billion worth of Chinese imports if China would retaliate against the US tariffs. The Chinese Commerce Ministry replied quickly that China would "strike back hard."

American tariffs on $34 billion of China goods came into effect on 6 July. China activated retaliatory tariffs for the same amount. The tariffs accounted for 0.1% of the global gross domestic product.

Reactions to the Announcements

Following announcements of escalation of tariffs by the U.S. and China, representatives of several major U.S. industries expressed their fears of the effects on their businesses. Organizations critical of the intensifying trade war included National Pork Producers Council, American Soybean Association, and Retail Industry Leaders Association. Several mayors representing towns with a heavy reliance on the manufacturing sector also expressed their concerns.

Proponents of the increased U.S. tariffs included Scott Paul, president of the Alliance for American Manufacturing.

In anticipation of tariffs going into effect, stock prices in the U.S. sustained significant losses for the two weeks prior [to the effective date]. Paradoxically, on 6 July, when the tariffs went into effect, markets rebounded and rallied due to positive jobs report. Asian markets similarly ended the day on a positive note.

https://en.wikipedia.org/wiki/2018_China%E2%80%93United_States_trade_war