Lecture on the US-China Trade War

Introduction

• Discussion about the ongoing trade war between the United States (US) and China.
• The conflict involves both countries imposing tariffs on each other's goods.
• The trade war has significant effects on global industries.

Background of the Trade War

• Frustrations between the US and China have existed for a long time.
• Tough rhetoric became apparent during the 2016 US presidential campaign.
• Investigation into China's economic practices revealed actions that frustrated American economic interests.

Historical Context

• China's dramatic economic rise starting in 1978 under Deng Xiaoping.
• Integration into the global economy and the World Trade Organization (WTO) in 2001.
• Expectations for China to adopt a western capitalist economy model were not fulfilled.

US Complaints Against China

• Allegations that China does not play fair in the global market.
  • Unequal treatment of foreign and domestic companies.
  • Accusations of technology theft from foreign companies.
• Comparisons to US espionage, but China accused of doing so for commercial gain.

Trump's Administration Actions

• Trump administration imposed tariffs to compel China to change its economic practices.
• July 2018: 25% tariffs on $34 billion in Chinese goods.
• Tariffs impacted US firms and were politically contentious, affecting Trump’s voter base.

Economic Impact of Tariffs

• Tariffs serve as taxes on imported goods from a specific place.
• China's tariffs target significant US exports, like soybeans.
• Uncertainty in business investment decisions due to market unpredictability.
• International Monetary Fund (IMF) predicts slower global economic growth due to trade tensions.

Potential Resolution

• Talks of a "phase one" deal to lift some tariffs.
• US demands for China to purchase more American produce and improve intellectual property rules.
• Challenges in reaching a comprehensive deal due to the scope of US demands.

Broader Implications

• Beyond tariffs, the US has restricted some Chinese companies, particularly in the tech industry.
• Huawei, a major Chinese tech company, has been heavily subsidized by the Chinese government.

Additional Resources

• Further information available in films and articles analyzing Huawei and the trade war.

Conclusion

• The trade war remains a complex geopolitical issue with broad economic implications.
• Ongoing negotiations could lead to potential resolutions, but significant challenges remain.