The president of the USA, Donald Trump, announced on July 6th, 2018 that he would implement tariffs on trade with China. The china-specific tariffs were set to limit the value of imports coming from China into America on the basis of promoting American products as an alternative. Since then, the world has seen a constant back and forth between the two countries setting various trade limitations against each other, resulting in what is commonly referred to as a trade war. The various talks between the countries have yet to produce tangible results as they stall the process to a fruitful resolution.
Further to this trade war, Trump constricted the number of solar panels, which China believes further damages their investment in the global progression of sustainability. China has since lodged two formal complaints to the World Trade Organisation (WTO) for the damage incurred both financially and economically, for violating WTO agreements on safeguards. The international community has compared The US treatment of China to colonial England’s war on China in the 1800s.
The continuing trade war has resulted in various products, both Chinese and American, to be targeted. The source for much of the tension stems from the race for 5G, the fifth generation of cellular network technology. Many countries are racing to incorporate new, ultrafast technology, but Chinese technology company, Huawei, stands out as the frontrunner, surpassing American companies of the same nature. In retaliation, Trump placed Huawei on its “entity list,” which barred US companies selling to Huawei without government approval, with China responding with its entity list. As of June 29th, 2019, The US has relaxed the ban on Huawei while resuming trade negotiations with China.
In addition to the race to 5G, there also exists the race of procuring and establishing the advancement of artificial intelligence (AI) technologies. China has plans to incorporate AI self-sufficiency into its manufacturing to limit dependence on other countries for sophisticated machinery. Recently, China has overtaken the US as the number one recipient of AI funding, with 48% of the total compared to America’s 38%. China is also the largest producer of scientific research papers regarding AI. The actions of the US are too slow or halt the growth of China’s growing AI knowledge to create dependence on the US for technology and science.
Since the start of the trade war, China is increasing its focus on domestic consumption, restructuring its economy, and redistributing wealth. These measures have boosted Chinese support for the government and allowed for the stock market to recover after the initial shock of the first tariffs. Furthermore, China can import important resources from countries other than the US, a process which is streamlined due to the Belt and Road Initiative (BRI), a system of trade routes from Asia to Europe and Africa. The future of Sino-American relations is uncertain, but with China’s recent recoveries from economic curveballs and their new trade routes providing resource security, it is safe to say China should be able to weather the storm.