War and peace and war, news by Hebei longsheng
| War and peace and war - two years of U.S.-China trade conflict The U.S.-China trade war reached its second anniversary on Aug. 21, 2019 with the first shot defined as being the U.S. section 301 review of China’s intellectual property practices. At that stage the U.S. trade deficit with China had reached $355.6 billion in the 12 months to Jun. 30. 2017. This report outlines nearly 50 events in seven phases – including an outlook to the end of 2019 – that have defined the trade conflict. Events have culminated with the U.S. trade deficit reaching $405.4 billion in the 12 months to Jun. 30, 2019. In the most recent phases, talks between President Xi and President Trump on Jul. 1 led to a third ceasefire in tariff increases and Chinese commitments to buy more agricultural products. That process rapidly ended by mid-August with President Trump applying duties to all Chinese exports in two phases on Sept. 1 and Dec. 15. The trade war widened beyond tariffs with exchange rates and the political situations in Hong Kong and Taiwan being drawn in. On Aug. 23, the Chinese government announced tariff increases on 5,078 products by 5% to 10% in two phases on Sept. 1 and Dec. 15. Those facing extra tariffs on Sept. 1 are led by soybeans worth $3.20 billion in the 12 months to Jun. 30, crude oil worth $2.55 billion and pharmaceuticals worth $1.16 billion. The products in the Sept. 1 group may have been chosen for their recent recovery – U.S. exports in that group fell by just 15.2% year over year in 2Q compared to 20.4% for the Dec. 15 round. Looking ahead there may be few opportunities for de-escalation. President Trump already ordered a 5% point increase in all existing and future tariffs as well as considering the options for restricting U.S. companies’ investment in China. The U.S. Congress may also take tariff- and non-tariff related actions after Labor Day and relations with China will remain in focus during the election process. The UN General Assembly from Sept. 23 may mark the last opportunity for Xi and Trump and sign a deal before year end. The 70th anniversary of the PRC on Oct. 1, 2019 may mean the Chinese government is in no mood to compromise later in the year. |
