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A Controversial Barrier: The Trade War between the U.S. and China
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In 2011, five years before he ran for the presidency, Donald Trump tweeted that China was “neither an ally or a friend - they want to beat us and own our country.” This tweet reflected the growing economic tensions between the U.S and the Republic of China, foreshadowing the ceaseless trade war that would develop during Trump’s stewardship. Though it is too early to tell what Trump’s true motives are with so much provocation on China, it is unmistakable that, since the beginning of the trade war, both the U.S. and China have suffered losses in their respective economies. The result of this domestic hardship is that the American public is beginning to question the Trump administration’s decisions. As prices begin to rise as a result of increased tariffs and as the stock market continues to fluctuate due to the uncertainty that the trade war produces, the Trump administration will need to find an effective strategy for bringing this economic confrontation to a close. At the same time, the Chinese government has every incentive to draw the negotiations out as long as possible, hoping either to put greater pressure on Trump in the leadup to the 2020 election or to benefit from his potential loss, at which point, the Chinese would be in a position of greater strength. Given these variables, although there has been a noticeable change in American and Chinese economies, time will tell whether we or China is benefitting from this trade war, or if both nations aren’t at all.

Since the 1970s, when Richard Nixon re-opened relations with China, the United States has largely followed a policy of engagement and containment. However, since the election of Donald Trump, the U.S. has become much more aggressive.[1]

Trump’s confrontation is a drastic policy of dealing with China. Its roots originate from “offensive realism,” which discounts the beneficial influence of economic interdependence, international institutions, and technological advancements that liberalism usually highlights. A confrontational world would be one where all societies are not trusting of each other and are constantly fearful. Political scientist John Mearsheimer depicted that great powers would have a “zero-sum” mindset, meaning that all gains come at the expense of another country’s loss. With this mindset, nations are not sure of others’ intentions and rely on themselves for survival. Confrontationists also believe that China’s rise will not stay peaceful for long, and that “if it continues its dramatic economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war.” [2] This means that efforts to cooperate and contain China’s growth will be increasingly difficult, and may lead to China passing the US instead. Confrontationists also disagree with attempts to reason with or integrate China as a whole with the U.S., claiming that it only serves as a means of strengthening them.

Containment and Engagement have historically been a much more popular choice for policymakers. The objective is to perpetuate and expand American presence in Eastern Asia. While this remains consistent with a confrontational approach, containment and engagement differ by supplementing military and political pressure with benefits that can be received through cooperation. In other words, this policy offers incentives and deterrents as a way of reshaping Chinese behavior. Supporters also argue that “China does not pose a threat to America’s vital security interests today, tomorrow or any time in the near future.”[3] Unlike confrontationalism, the policies that attach to Containment and Engagement draw attention to the important economic or demographic problems that are hindering China’s development and divert resources to assert a foreign policy. Additionally, containers and engagers do not take peace with China for granted. They claim that the Chinese government’s employment of nationalism among its people is worrisome, in addition to its unclear long-term goals and unreliable commitment to global order. Therefore, the best appeal of containment and engagement for the U.S. is that it preserves the flexibility and options to limiting tensions between China and its neighbors by integrating the PRC into the existing international order, which seems appropriate for current times, as the U.S. is limited by resource constraints, many global commitments, and popular anti-interventionist sentiments. Supported by a liberal theory of international relations, this policy imagines that Chinese internal structure can be refashioned in a manner that will yield new international policies and agreements.

Since the beginning of his presidency, President Trump has repeatedly provoked China with his tariffs and with his policies. Though tariffs have been a national policy that began to fade away in the 19th century, Trump embraced tariffs as a punitive tool against China, despite their potentially detrimental effects on the U.S. economy. During his campaign for the nomination, he proclaimed on May 2, 2016 that, “We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world.” It was quite evident that the stage was set and that the sides were chosen. Then, on April 7, 2017, there seemed to be hope, as Xi Jinping and Trump proposed a 100 Day Action Plan to settle many trade differences. However, no large leaps or agreements were made for addressing the deeper, structural problems, such as trade deficits, currency manipulation, and forced technology transfers that lie at the center of Trump’s dispute. Accordingly, little improved in the relations between the two countries. Nevertheless, there were deals made. For example, the U.S. and China did agree to a trade deal that would give U.S. firms greater access to China’s agriculture, energy, and financial markets, while China gained access to sell cooked poultry to the U.S., Trump even paid a “state visit plus” to China, where it was believed that the relationship was warmed. Initially, it seemed as if the threat of tariffs alone had been sufficient to bend China’s will. And yet, the Trump administration so far has little to show for its provocative stance. Instead, the Chinese government has largely yielded verbal concession that Trump has, on occasion, been able to take as victories. The promise to allow greater access to the agricultural sector is one. Although China made this initial verbal concession, there has been no evidence that this promise has been put into effect.

Complications arose as Trump’s administration imposed a memorandum on March 22, 2018. A WTO case was filed against China, and investments were restricted in key technological sectors. Additionally, the administration started imposing multiple tariffs on key factors, such as aerospace, information communication technology, and machinery. As a response, China has responded with its tariffs and price changes. Such tariffs were levied on several U.S. goods, including soybeans, beef, pork, seafood, vegetables, whiskey, and ethanol; these tariffs amounted to roughly USD $50 billion. More recently, both countries have doubled down on their positions, with Donald Trump threatening to raise tariffs from a total of $250 billion in 2018 up to $325 billion - though this new round may be called off as his administration negotiates with Beijing. These tensions have resulted in China placing tariffs on $110 billion worth of imports from America in 2018.

Recently, it seems that Trump has been upping the pressure on China. Recently, he has stated on Twitter that the U.S. would be “hitting China with tariffs” worth up to $300 billion and that he would be expanding tariffs to all imports from China on September 1st. [4] If this threat is carried through, it will result in a massive shift in the economy. His justification was that China had reneged multiple times on their statements and did not follow instructions to stop selling fentanyl into the US, causing many deaths. Due to Trump’s measures, it can be inferred that he seems to be using tariffs and taxes on imports as a means of provocation specifically to coerce China, attempt to prevent it from reneging on deals and force China to aid the U.S. or risk losing a large part of the market.[5] Trump’s frustration over the lack of a deal reflects not only the dimensions of the trade war itself, but also the shifting political climate in the U.S. As the new presidential election approaches, if Trump has nothing to show for his trade war, and if the U.S. is still paying massive payments to support affected farmers, Trump’s prospects at being elected might decline.

At the same time, many of Trump’s decisions to provoke and confront China may be beneficial for China, instead of the U.S. For example, the U.S has stopped supplying China with high-protein food crop imports such as soybeans ever since the beginning of the trade war. In the first half of 2019, China’s imports of soybeans fell approximately 14.7% from a year ago. As a result, China has developed a reliance on the farmers’ production for soybeans. What is worrisome is China’s response, as they imposed a 25% tariff on all U.S. soybeans in return to protect their private companies. The U.S. exports about 30% of its soy harvest and half get sold to China.  At the start of the year, only 3% of last year’s exports to China had been sold to the Chinese.  Recently, China made a few purchases, but that still leaves an estimated 13 million metric tons that would normally have been shipped to China, now sitting in storage facilities. Additionally,  many argue that despite what Trump suggests, the reality is that Trump isn’t winning the war. Although his tariffs have proved partially successful in hurting China’s economy somewhat, they’ve hurt America equally as much. Citizens are negatively affected too. Economists estimated that the average household would end up paying more than $1,000 a year in higher prices. A trade war is only effective if it’s successful in coercion, and examples of these include trade wars with smaller nations like Canada and Mexico. A large reason that China is affected much less by trade policies is that their economy is built on internal businesses instead of international deals. Trump’s beliefs in tariffs stem largely from solipsism and overconfidence, along with nostalgia and the fact that America’s tariff men are utilizing past strategies instead of innovating and finding new solutions. In the end, unless both nations reach a deal, regardless of what happens to China, the U.S. will have a scar in the economy.

While the U.S. consumer and farmer may be suffering in the short term, it is possible that the Trump administration’s policies have been effective in containing and keeping China’s growth at bay. Trump has lately been claiming that the U.S. can win the trade war with Beijing, pointing out that China's economy has been slowing down after a long period of rapid growth, due to actions taken by the U.S. Though it is possible that the policies being pushed by Trump’s administration is having some effect, it is too early to tell whether or not the results are positive or negative in the long-term. There has been an effect on China’s economy since the beginning of the trade war, but whether or not China can absorb the U.S.’s repeated provocations without the U.S. also being negatively affected is questionable. Although this may be a possibility, there is simply not enough evidence showing so. When Trump first announced tariffs on China in 2018, China’s domestic consumption was responsible for around 76.2% of its GDP growth. Though the tariffs did have an initial shock on the Chinese stock market, China eventually absorbed the impact and bounced back after an initial sharp decline. Since then, the Chinese government has introduced new policies to boost domestic consumption, proving that the trade war has backfired on Trump, re-igniting China’s efforts to redistribute wealth and restructure its economy.  President Trump in effect is using American citizens as hostages for the trade war, not China.

Though declaring this trade war seems to have negatively affected citizens, it may not necessarily mean all of Trump’s policies are futile. After all, under his presidentship, total nonfarm employment has grown by 5.6 million. The economy has also added jobs for 105 consecutive months, including the first 29 months of his administration. The average monthly gain under Trump so far is 194,000 — compared with an average monthly gain of 217,000 during Obama’s second term. Trump will have to pick up the pace if he is to fulfill his campaign, which boasted that he would be “the greatest jobs president that God ever created.” Manufacturing jobs also increased with Trump’s election. The number rose by 486,000 between his inauguration and June and was previously decreasing under Obama’s presidency. In terms of economy, the U.S. GDP also grew. Though it was lower than the 4-6% he had boasted, it was growing at an annual rate of 3.1% during the beginning of this year, even spiking to 4.2% in the second quarter of 2018. Therefore, even though Trump may be hurting the economy with his tariffs and taxes, there seems to be some actions being taken to negate or assuage the current situation, whether it be the trade war or another entirely different policy.

But what could Trump’s intentions truly be with a trade war? Is the abusing of the people solely because he wants to provoke and coerce China, or are there other factors not being considered by many analysts and economists? It is very plausible that Donald Trump is using the trade war as a means of improving his public image and approval ratings to be re-elected, as his current presidency will come to an end in 2020. By making such blatant statements, and constantly being agitated with China, Trump portrays himself as a savior and hero of the country, set on helping the U.S. “be great again.” He does so as a means of gaining popularity for himself and not for his nation. By being re-elected, this may allow Trump to continue his trade war or quest for dominance over Eastern Asia, and there’s no telling how much citizens will need to give up for such a hapless dispute.

Cihan Sahin is a senior at The Pennington School who enjoys studying International Relations and Economics. Cihan is a lifelong musician, specializing in piano and voice, and is an international advocate for the Baccarelli Institute in Sao Paulo.

Bibliography

Secondary Sources

Brzezinski, Zbigniew. "Clash of the Titans." Foreign Policy, 22 Oct. 2009. Foreign Policy, www.foreignpolicy.com/2009/10/22/clash-of-the-titans/. Accessed 18 Aug. 2019.

Lee, Don. "U.S. policy toward China shifts from engagement to confrontation." LA Times, 31 Dec. 2019.  LA Times, www.latimes.com/business/la-na-pol-us-china-20181231-stwory.html. Accessed 18Aug. 2019.

"Myth." The National Interest, 1 Sept. 2009. The National Interest,                        www.nationalinterest.org/greatdebate/dragons/myth-3819. Accessed 18 Aug. 2019. 

"Trump says the US will slap tariffs on virtually all Chinese imports next month." Business Insider, 1 Aug. 2019. Markets Insider,markets.businessinsider.com/news/stocks/trump-china-trade-war-us-imposing-more-tariffs-in-september-2019-8-1028409537. Accessed 18 Aug. 2019.

"Trump says the US will slap tariffs on virtually all Chinese imports next month." Business Insider, 1 Aug. 2019. Markets Insider, markets.businessinsider.com/news/stocks/trump-china-trade-war-us-imposing-more-tariffs-in-september-2019-8-1028409537. Accessed 18 Aug. 2019.


[1] Lee, Don. "U.S. policy toward China shifts from engagement to confrontation." LA Times, 31 Dec. 2019. LA Times, www.latimes.com/business/la-na-pol-us-china-20181231-story.html. Accessed 18 Aug. 2019.

[2] Brzezinski, Zbigniew. "Clash of the Titans." Foreign Policy, 22 Oct. 2009. Foreign Policy, foreignpolicy.com/2009/10/22/clash-of-the-titans/. Accessed 18 Aug. 2019.

[3]"Myth." The National Interest, 1 Sept. 2009. The National Interest,       nationalinterest.org/greatdebate/dragons/myth-3819. Accessed 18 Aug. 2019. 

[4] "Trump says the US will slap tariffs on virtually all Chinese imports next month." Business Insider, 1 Aug. 2019. Markets Insider,markets.businessinsider.com/news/stocks/trump-china-trade-war-us-imposing-more-tariffs-in-september-2019-8-1028409537. Accessed 18 Aug. 2019.

[5] "Trump says the US will slap tariffs on virtually all Chinese imports next month." Business Insider, 1 Aug. 2019. Markets Insider, markets.businessinsider.com/news/stocks/trump-china-trade-war-us-imposing-more-tariffs-in-september-2019-8-1028409537. Accessed 18 Aug. 2019.

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