USA CHINA TRADE WAR

1. US-CHINA TRADE WAR
诺甜
2620210087

2. US-CHINA
TRADE
WAR

3. TRADE WAR
 What is Trade War?
 Impose tariffs for
goods
 Negotiate
 Affects the economy
 US-China Trade War

4. President Trump planned to
placed tariffs on Chinese
products.

5. MAJOR CITIES FOR BUSINESS IN CHINA
• China Trade- key
factor of economy
• Major cities
 Beijing
 Shanghai
 Guangzhou

7. October, 1949
People’s Republic of
China Established
Chinese Communist Party leader Mao Zedong
establishes the People’s Republic of China in
Beijing.

8. September, 2008
China Becomes Largest U.S.
Foreign Creditor
August, 2010
China Becomes World’s Second-
Largest Economy
.
November, 2011
U.S. ‘Pivots’ T
owardAsia-ASEC
& TPP

9. February, 2012
Rising Trade Tensions
• The U.S. trade deficit with China rises from
$273.1 billion in 2010 to of $295.5 billion in
2011.
• The increase accounts for three-quarters of
the growth in the U.S. trade deficit for
2011.
President Obama announces new efforts to
enforce U.S. trade rights in China
May 19, 2014
U.S. Indicts Chinese
Nationals- 5 Chinese
Hackers

10. Chinese President Xi Jinping and U.S.
Secretary of State Rex Tillerson in Beijing,
March 19, 2017
February 9, 2017
Trump Affirms One China Policy
After Raising Doubts
• Under One China policy, the US-maintains
formal ties with the People’s Republic of China.
April 6 – 7, 2017 Trump Hosts Xi at Mar-a-Lago
• President Donald J. Trump welcomes China’s Xi
Jinping for a two-day summit at the Mar-a-Lago
estate in Florida,
• In mid-May, U.S. Commerce Secretary Wilbur
Ross unveils a ten-part agreement between
Beijing and Washington to expand trade of
products and services like beef, poultry.

12. TRADE WAR

13. TIMELINE – US CHINA TRADE WAR
Total US tariffs applied exclusively to China: US$250 billion
Total Chinese tariffs applied exclusively to US: US$110 billion

15. GAIN OF USA IN TRADE WAR
If We Cannot Trade
With China, We
Sneeze. If China
Cannot Trade With
Us, They Catch
Pneumonia.
-Donald Trump.

16. GAIN OF USA
• Chicken little stock market.
• Lesser dependency on
foreign countries.
• Growth in export oriented
business.
• Principle of protectionism.

18. LOSSES OF USA IN TRADE
WAR
As of July 2018, the United States exported a total of
$74.3 billion in goods to China. It imported $296.8
billion, according to the US Census Bureau. As a
result, the total trade deficit with China is $222.6
billion.

19. LOSSES OF USA IN TRADE WAR

20. LOSSES OF USA IN TRADE WAR
• Unemployment of
skilled workers
• Decrease in
aggregate
consumption of
exported goods
• Agricultural sector
faces a major blow

21. WHAT CHINA GAINS
• U.S. goods exports to China are mostly
agricultural produce and finished products.
• China’s exports to the U.S. are typically
Chinese assembled goods that contain many
foreign parts and components . E.g. Apple

22. WHAT CHINA LOSES
• China stock decreases by 27% in last 4months.
• China will not inflict as much pain on its rival
as it is unable to match US tariffs on a dollar
for dollar basis, because it exports far more to,
than it imports from, the US.
• If China was imposed 25% tariff on all their
imports-5.5 million jobs lost.

24. THE ELECTION OF DONALD TRUMP RESULTED IN MARKED SHIFT
TOWARDS CHINA
What has happened so
far?
Why the Trade War
Started
• US has a high trade deficit with
China, estimated $308.8 billion in
2019
• Alleged intellectual property theft by
Chinese companies
• Lack of market access for US
companies in China
• Subsidies offered to local Chinese
manufacturers that makes foreign
companies difficult to compete in
China
• The US, under Donald Trump
administration, has pursued to bring
manufacturing back to the US
• Starting 2018, US and China have
imposed tariffs on number of goods
ranging from agriculture products to
commodities such as steel
• US imposed various sanctions on
Chinese tech giant Huawei
• In Jan 2020, US and China reached
an agreement for Phase 1 trade deal
where China committed to buy an
additional $200 billion of American
goods and services by 2021
• China has, however, fallen short of its
Jan 2020 deal commitment, reaching
only 53 percent of the expected
purchase target through September
2020
What Next?
• With Joe Biden set to take over as the
President of the US in Jan 2021, the
US stance will largely depend on his
approach hereafter
• Its likely that the US might be more
accommodative but unlikely that it
would go back to the pre-2016 stance
on China
• However, there might be more
predictability as per the direction
and stance which the Biden
administration takes in the future on
US-China relations

25. 2017
2018
2019 and 2020
• Trade talks between the US and
China begin with the primary aim
of reducing US trade deficit with
China
• Trade talks fail between the US
and China in July 2017
• The US started imposing tariff
on Chinese imports on goods
such as solar panels, steel, and
aluminum, etc.
• China retaliated with counter
tariffs on the US imports
• The trade war continued with both
countries imposing tariffs
• In 2019, US mellowed its stance
and talks were held between the
US and Chinese officials but no
agreement was reached
• In Oct 2020, US announced a
Phase 1 deal that included
suspension of planned tariffs
US-China Trade War Brief Timeline
THE US-CHINA TRADE WAR HAS GOTTEN WORSE OVER TIME BUT
WITH ELECTION OF JOE BIDEN TO THE WHITE HOUSE, THERE MIGHT
ME A MORE ACCOMODATIVE VIEW AT WHITE HOUSE

26. US CHINA
• A September 2019 study by Moody’s • US tariffs on Chinese goods has made
Analytics found that the trade war had exports from other countries
already cost the U.S. economy nearly competitive
300,000 jobs and an estimated 0.3% of
• In first half of 2019, US tariffs has inflicted
real GDP
an estimated $35 billion blow to Chinese
• A 2019 report from Bloomberg tariffed exports in US market that is
Economics estimated that the trade war approximately 25% export loss
would cost the U.S. economy $316
billion by the end of 2020 • US sanctions on Huawei has highly
impacted the company and limited the
• A research from the Federal Reserve China’s flagship tech giant reach globally
Bank of New York and Columbia
University found that U.S. companies lost • Some studies point out that the trade war
at least $1.7 trillion in the price of their has slowed down an already slowing
stocks as a result of U.S. tariffs imposed Chinese economy, with companies
on imports from China diversifying their supply chains amid
trade war and COVID-19 pandemic
BOTH CHINA AND THE US HAVE BEEN AFFECTED BY THE TRADE
WAR, WITH OVERALL COSTS FOR CONSUMERS INCREASING

27. • A large part of manufacturing is expected to shift away from China as
companies try to diversify their supply chains. India is expected to be
one of the biggest beneficiaries of the shift
• As per UN trade and investment body, India gained about $755 million
in additional exports, mainly of chemicals, metals and ore, to the US in
the first half of 2019 due to the trade diversion effects of Washington's
tariff war with China
• The top three sectors in India that could benefit from the trade war are:
pharmaceutical, chemicals and engineering
Challenges:
• The land and labor laws posses a challenge to the companies that see
India as a favorable destination
• The infrastructure issues further exasperate the problems for India
INDIA NEEDS TO CARRY OUT REFORMS TO BECOME THE
BENEFICIARY OF THE ONGOING US-CHINA TRADE WAR

28. Thankyou