America v China: why the trade war won't end soon | The Economist

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America v China: why the trade war won't end soon | The Economist 4.5
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The world’s leading superpowers are locking horns. Over the past 16 months America and China have been trading blows through tariffs on goods. The impact is being felt on industries worldwide. But what is the story behind the America-China trade war?

So the trade war, what have you guys been looking at? The US doesn’t like that China is growing so fast and set to overtake America as the biggest economy in the world if it hasn’t already by certain measures. Basically China and the US are caught in this race of imposing tariffs on each other so the US slaps a high tariff on certain products then China retaliates.

It’s multiple industries across multiple markets, it’s huge. And I think right now would be a really good time to look at what’s happened how it could impact the world from now on.

At The Economist, we’ve been covering the trade war extensively Soumaya Keynes is our trade and globalisation editor based in Washington, DC.

How did this whole trade war kick off? How did this whole trade war start? For a long time there have been frustrations that past American administrations had with the Chinese. On the 2016 presidential campaign trail you started to see some really tough rhetoric.

China’s economic rise has been dramatic. In 1978 China’s GDP at market prices was just 6% of America’s. Last year it had grown to 66%. When considering local spending power China has already overtaken America. This unprecedented growth began with President Deng Xiaoping. He started opening up China’s economy to the world in 1978 and the country quickly became “the world’s factory”. Over the next decade, exports as a share of GDP tripled and by 1988 15% of China’s exports went to America. The World Trade Organisation opened its doors to China in 2001. And it was America that ushered it in.

After joining the WTO, China became an economic superpower. But people had expected the country to also become more like a Western capitalist economy. That didn’t happen. America now claims that China achieved its growth by not playing fair. Are those claims justified?

The Trump administration has been using tariffs or taxes on imported goods to try to force the Chinese to change their ways. In July 2018 America imposed tariffs of 25% on $34bn worth of Chinese products. That almost doubled the average tariff rate on Chinese imports from 3.8% to 6.7%. And it’s American firms that have to pay that tax. But with every increase from America, came an increase from China. Since the start of the trade war China has more than doubled its average tariff rate. America’s has tripled. The fight has become overtly political because China’s tariffs are hitting President Trump’s voter base. Many counties where Trump won in the 2016 election were here in the Great Plains and these are the counties most affected by China’s tariffs.

As things stand now, a ceasefire in the trade war could be drawing near. The two leaders are hoping to agree on a “phase one” deal soon which could mean some tariffs being lifted The Trump administration wants China to buy more American produce and tighten up their intellectual property rules. If that phase one deal is signed will it be the beginning of the end of the trade war?

Even if there is a phase one deal there will be a lot of issues still to be resolved. But there’s more to the trade war than just tariffs. America has also imposed restrictions on some Chinese firms especially ones in the tech industry.


💬 Comments on the video
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Doing a report on trade war, and only interviewed one side.

Author — Bushangels

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This video did not give any insight. Totally a waste of time.

Author — A. Lai

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Warning: There are NO economists at The Economist.

Author — J J

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My mom, the home econmist, could have made a more meaningful analysis.

Author — LST

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"Now-overt economic warfare."
Not trade war.

Author — Brian de Riancho

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"The US steals, but never for commercial purposes" I rolled my eyes SO HARD there they fell out of my sockets

Author — Ashton Babcock

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One sided, biased, and without a deeper understanding of the issue.

Author — Minn

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You know what? American never steal, they rob.

Author — Fstt Edward

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i learned more from the comments than this video...

Author — Zeinab Kashani

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I could get better analysis from a taxi driver.

Author — Sam Reason

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4:24 America never steal stuff for commercial purposes? What about all the Oil and Opuim they 'took' (still taking) from Iraq and Afghanistan? 😁💯

Author — Mikhel Brown

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In 2019, Does anyone still believe in that any economists work at the economist?

Author — Kai Guo

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As Huawei said how can we steal something the US don’t have? He has a point.

Author — GreaterBayArea Hero

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Just because we’re trudging through our country's economic journeys, trying to get the best out of it doesn’t mean that we can’t get help along the way.

Author — Jace Grigore

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"America doesn't like that China is growing". This is diabolical analysis, high school level stuff

Author — christopher neil

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European and USA spent the last 300 years stealing from Africa, Asia and South Asia, they called it colonisation.

Author — sulaak

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"never for commercial how insane and d-s can these hypocrites be?

Author — Mark Wen

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4:23 "Never for commercial purposes", when is it not commercial?

Author — Link

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How biased report, its like China is a villain because they want to prosper, lol that's the dumbest argument you can present

Author — Ali Pirzada

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The Economist has lost all credibility with this one.

Author — Phil Shifley