US/China Trade Dispute

Contents

Introduction ................................................................................................................................................... 3
Summary of articles ...................................................................................................................................... 4
Link between articles .................................................................................................................................... 9
Lessons learned ........................................................................................................................................... 10
Conclusion .................................................................................................................................................. 11
Reference .................................................................................................................................................... 12
Introduction

The trade war between US and China is mainly focused on the Tariffs on the goods that are

bought and sold between these 2 nations. The present president of the US accused of China of

unfair international trade and also a violation of intellectual property law. This grievance was

still an issue before China entered the WTO and the previous administrations of the USA were

also not able to fix this issue. China has been able to bypass the intellectual property law by

forcefully creating a joint venture with Chinese firms giving them the right to use the technology

and improve on it. China has also been accused of discrimination against foreign companies are

not very respectful on the patent and copyright laws. This report will shed light on some of these

issues by assessing articles on the subject matter.

Fig: 1
The image above shows the inequality of trade between the USA and China where the product

imported from China is far more from the export to the nation.

Summary of articles

US-China trade conflict looks set to escalate

The dispute began with China refusing to reduce the trade tariffs on the steel and aluminum

imports for the US during the month of March 2018. There were other countries such as Canada,

Mexico, and several EU members who decided to manage the steel tariffs. But not China, as they

suspended the tariffs for the US. Not only that they also raised several other duties for 128

products from the US. This is to respond to the tariffs imposed by the US on steel and aluminum

imports. This tension started to rise when China imposed 25% tariff on the over 100 US products

("US-China - trade dispute | Economics Online", 2019). However, eventually, the China

government decided to ease the restrictions, leading to the decision of significantly increasing the

imports of agricultural products from the US so they could balance the trade relationship.

A New Wrinkle in The U.S.-China Trade Dispute

The initiative of trade negotiations between China and the US is not bringing the expected level

of outcomes for both the country’s economy. The poor performances of these negotiations are

observable from the S&P 500 Index. The recent incident of the arrest of the renowned chief

financial officer (CFO) of the Chinese widely known tech company Huawei has acted as a

catalyst to make the situation worse between China and the US as both parties accused each

other of idea theft. The situation got worse with the sudden scarcity in the US trade and a sharp
fall in the export earnings. As a result, the US economy is not being able to generate expected

numbers of employment ("A New Wrinkle In The U.S.-China Trade Dispute", 2019).

Fig- 3

China is one of the digest defaulter of copyright laws and the companies in china openly copy,

steal as well as improve on the existing technology without the permission of the patent holders

and as a result their R&D spending is considerably low and this gives them a competitive edge.

US-China economic dispute is 'not about trade'

The government of the US is continuously accusing China of intellectual property theft and other

activities which are hindering the growth of the US economy. Although the Chinese government

is strongly denying such allegations and are determined to not offer any unreasonable

concessions to the US government. The US government is intending to minimize the potential

loss incurred from the cost of importing products worth a high amount from China and are
suggesting changes in the legal systems of the Chinese government regarding this. However, a

decision is yet to make which will determine the future of this economic conflicts between China

and the US and the future actions of the governments of these 2 countries ("US-China economic

dispute is 'not about trade' | DW | 11.01.2019", 2019).

Fig: 2

The figure clearly states that USA export very little to China in the form of agricultural products

and raw material and import a massive amount of finished goods especially computer and this

has resulted a trade deficit of close to close of 400 billion for USA.

Hopes rise for US-China trade deal after Mueller report

The 2016 Mueller report suggested that the current president of the United States of America,

Donald Trump and his 2016 political campaign was influenced by the nation of Russia. Hence,

the Mueller report couldn’t prove any link of Russia with the 2016 presidential campaign of

Donald Trump, hence, the new trade deal among these nations will include more incentives and

the effect of Mueller report will also work in the favor to China to some extent for signing more

Lucrative trade deals with the United States of America. On the other hand, the president of

United States of America, Donald Trump has started that are still chances of complexity among

the nations and the complexities can be only resolved when the two presidents discuss these

matters face to face. Both nations are trying to push their own terms and agreements. These

nations have already shown resentment towards each other’s economic policies and this includes

China’s critic of the USA’s monetary policy of quantitative easing ("Mueller report fuels hopes

for a US-China trade deal", 2019). This can be also explained by the cultural environment of

international business, as these nations follow separate corporate cultures that are not accepted

by international business domain. Meanwhile, the US has managed to export soybean to China as

the trade disputes started to decrease.

China February soybean imports from U.S. rise as trade dispute eased

The nation of the United States of America and China has commenced the import of soybean and

due to this reason, the trade war among the two nations seem to ease up. The nation of China,

which also heavily relies on agriculture, has imported 907754 tonnes of soybeans from the

United States of America. But the constraints that are influenced by China is still not allowing all

the importers of China, to import more soybeans to the nation so the Chinese importers are
relying on the nations such as; Brazil to import soybeans ("China February soybean imports from

U.S. rise as trade dispute eased", 2019). The comparative advantage of the international trade

theory can be included here. The comparative advantage focuses on the aspects that are based on

the idea that a nation that can be better at producing one form, of goods might not be better at

producing another form of good. Hence, for the US-China relation, this can be stated that both

nations can gain an advantage if they resolve current political disputes.

Link between articles

The trade disputes between the US and China has been pointed out in the articles. However, the

most common aspects of these articles would be the way the government intervention was a part

of this situation. The main reason the conflict stayed strong when it was there is that the

government of China decided to respond to the tariff decision from the US government which is

why the conflict increased. Another reason China government did not go with alternatives is that

most of the imports from the USA were based on newer technologies which can impact on the

corporate social responsibility in Chinese society. However, the articles also show that the

Chinese government eventually decided to balance this trade relation by increasing the imports

by focusing on bringing agricultural and energy products from the US government so that the

disputes could be mitigated between these nations, which also indicates that by taking such

products from the US it would be easier for China to ensure the ethics and corporate social

responsibility to the society by using the agricultural and energy based products.
Lessons learned

The main reason the disputes between China and the US started is because of the imposed tariffs

on the steel and aluminum which happened because of the decisions taken by the US

government. So the first article shows that tariffs from China also was imposed for the US on the

steel and aluminum and they decided to keep this increased tariff, eventually leading to the

conflicts between the US and China slowly. The second article talks on the renowned tech

company Huawei, a company from China, facing the arrest of the CFO as they have been

accused of stealing ideas which raised the disputes between the US and China even more than

what it was before. The third article points out that the disputes continued as the US government

keep accusing China to stealing their ideas, while China kept denying the allegations. However

the same article also states that it was brought out by the US that they are looking forward to

minimizing the trade disputes, which also was responded by the China government positively

where the China government plans to increase the import from the US in terms of the agriculture

and energy-based products, as mentioned in the first article. On the other hand, this can be also

seen, that Donald Trump has also taken the steps to end the trade dispute with China as the

nations are under talks to commence profitable and harmonious trade disputes between the two

nations. Since China is again importing the soybeans from the United States of America as of

2018.
Conclusion

From the above discussion, it is evident that US claims on China are a legitimate one as China

has blatantly disregarded a number of international trade law and continues to do so which have

been adversely affecting the companies all around the world as they are unable to compete with

the Chinese products. In recent time, it has been seen that China is taking steps to resolve these

issues by balancing trade by buying agricultural products from the USA. More such initiatives

are necessary to form both superpowers in the current scenario to create a stable world economy.
Reference
China February soybean imports from U.S. rise as trade dispute eased. (2019). Retrieved from

https://www.todayonline.com/world/china-february-soybean-imports-us-rise-trade-dispute-eased

Mueller report fuels hopes for a US-China trade deal. (2019). Retrieved from

https://www.cnbc.com/2019/03/25/hopes-rise-for-us-china-trade-deal-after-mueller-report.html

US-China economic dispute is 'not about trade' | DW | 11.01.2019. (2019). Retrieved from

https://www.dw.com/en/us-china-economic-dispute-is-not-about-trade/a-47051929

A New Wrinkle In The U.S.-China Trade Dispute. (2019). Retrieved from

https://www.forbes.com/sites/greatspeculations/2018/12/11/a-new-wrinkle-in-the-u-s-china-

trade-dispute/#9a6f18419bab

US - China - trade dispute | Economics Online. (2019). Retrieved from

https://www.economicsonline.co.uk/Global_economics/US-China-trade-dispute.html
Appendix

Fig: 1
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Fig- 3