THE U.S.
-CHINA TRADE WAR
Before moving to the main part, let’s find out what is trade war.
A trade war is an economic dispute between two countries, occurring when one
country retaliates against another by imposing tariffs or other restrictions to
shield domestic industries from foreign competition.
Historically, trade wars have occurred several times but a major example today
is the Sino-U.S. trade war, which began in 2018 and had significant global
impacts. Both countries imposed tariffs and other measures to protect their
economies, peaking up to 25% tariff on each other goods.
So, what led to this conflict? The deep-rooted cause is the competition and
conflict between the world's two leading economies Over the past two decades,
China has demonstrated a strong rise in economic, military, and financial
strength. This has been seen as a threat to the U.S.’s leading position. As a result,
the U.S. has used trade war to curb China’s growth to keep its first place.
Specific reasons
1. The Protectionist Policy of the Trump Administration
Since taking office, President Donald Trump has pursued a protectionist trade
policy with the term “America First” and “Make America Great Again.” This
aimed to restrict the import of foreign goods to protect domestic industries,
leading to a trade war with China and causing trade conflicts with countries
considered U.S. allies.
Secondly, the large U.S. Trade Deficit with China was a key factor in the trade
tensions. In 2017, it reached $375 billion compared to f$100 billion in 2001. The
U.S. accused China of unfair practices like subsidizing businesses, manipulating
the yuan, and violating intellectual property rights. In contrast, China argued that
the trade deficit stemmed from excessive U.S. consumption and suggested that
the U.S. should increase exports to balance the trade gap. To address this issue,
President Trump imposed high tariffs on Chinese goods, leading to tit for tat
measures from China and escalating the trade war.
China's Ambition to Lead the World in Technology
China aims to become a tech leader by advancing its economy and reducing
reliance on key technological [Link] do this, China started the "Made in
China 2025”, to develop key sectors like robotics, artificial intelligence, .
However, China still relies on U.S. technologies. Then t,he U.S. accused China
of forcing technology transfers and stealing intellectual property, worsening
relations. Although China denied these claims, the disputes have further
escalated trade tensions.
So, while Thanh has shared with you an overview of nationalism and its key
features, I’ll now talk about the benefits it can bring.
FIRSTLY, Economic nationalism helps protect local industries from intense
competition with foreign goods. By imposing high tariffs, restricting imports,
and providing support to domestic businesses, governments can create a
favorable environment for emerging industries to develop and thrive. This is
especially important in key sectors such as agriculture, heavy industries, and
high-tech fields. A great example is South Korea’s support for its automotive
and electronics industries. In the 1960s-70s, the government imposed high tariffs
and import restrictions while subsidizing companies like Hyundai, Samsung,
and LG. Over time, the strategy paid off, turning Hyundai into a global
automotive leader and making Samsung and LG dominant in electronics.
Economic nationalism helps nations become more self-sufficient by reducing
their reliance on foreign products. When a country depends too much on foreign
suppliers, it becomes vulnerable to supply chain disruptions, political conflicts,
or global economic crises. This is particularly important in sectors that are vital
to national security, such as agriculture, energy, and technology. The COVID-19
pandemic highlighted this issue, many countries struggled to get medical
supplies because they relied too much on imports. But countries investing in
producing medical equipment locally better handled the crisis. By fostering
local industries, governments reduce economic vulnerabilities and ensure that
essential goods and services remain available regardless of external
circumstances. This not only strengthens national resilience but also creates
more jobs within the country.
The last benefit of economic nationalism is reducing the trade deficit trade
deficit occurs when imports exceed exports, causing budget deficits, currency
depreciation, and economic dependence. This weakens confidence, increases
unemployment, and reduces domestic competitiveness. To address this,
economic nationalism limits imports and boosts exports through tariffs, non-
tariff barriers, and subsidies for local industries, As a result, the country can
accumulate more foreign currency to repay debts, increase foreign
exchange reserves to ensure financial stability, stabilize the value of its
currency to control inflation, and maintain economic independence by
reducing reliance on foreign loans.
