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OSAKA , JAPAN: At the sidelines of G20 summit in Japan, the U.S-China trade relations were discussed by US president Donald Trump as he announced that US will not impose any further tariffs on Chinese goods and escalate the trade war between US and China after meeting his Chinese counterpart Xi Jinping.
What caught everyone in the business world by surprise was Trump’s decision to allow US firms to sell various American products to Huawei that are essential for its international business ,provided that it does not compromise US’s national security.
To have a clear picture of Washington’s tactics against Beijing, here is a timeline of the trade war between the two countries-
-May, 2014:
Before launching his presidential campaign in 2015 Trump started targeting China and even tweeted “Remember China is not a friend of United States!”
-May, 2016:
As a presidential candidate Trump made China his campaign priority and kept criticizing China for its $347 billion trade surplus with the US.
-May, 2017:
China- US strike a trade deal that cover poultry and beef but leaves out aluminium, steel and other issues.
-January, 2018:
Donald Trump imposes tariffs on solar cells and washing machines, China criticizes.
-March, 2018:
Donald Trump tweets, “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.”, sparks fear across financial markets and businesses.
Later this month Donald Trump imposes 25% tariff on steel and 10% on aluminium imports.
-April, 2018:
China retaliates with tariffs on $3 billion worth of goods.
-May, 2018:
China-US held trade talks in Beijing but no resolution was finalized, hence yielding no results.
-June, 2018:
DonaldTrump administration slaps 25% tariffs on $50 billion worth of Chinese goods citing theft of intellectual property, technology and its unfair trade practices as the reason.China retaliates with tariffs on $50 billion worth of American goods.
-September, 2018:
Donald Trump announces 10% tariffs on $200 billion in Chinese goods, with a plan to hike the rate to 25% at the start of 2019. He threatens additional tariffs on $267 billion in Chinese products if Beijing retaliates.
China said it would slap tariffs on $60 billion worth of goods in response to US duties.
-November, 2018:
Donald Trump and Xi jinping connects call and talk about trade.
Later this month Trump suggest tariffs on $200 billion worth of Chinese goods.
-December, 2018:
Donald Trump and Xi jinping have dinner at the G-20 summit in Argentina. The U.S. agrees to delay a planned increase of the tariff rate on $200 billion in Chinese goods to 25% from 10%. They set out to strike a trade deal within 90 days.
Trump touts big and successful trade deal was being formulated just to end up in vain later.
During the end of the month trade talks restart and American delegation heads to Beijing.
-April, 2019:
Treasury Secretary Steven Mnuchin says the U.S. and China are making progress on a trade deal, including resolving a key sticking point on enforcement that had been dragging out the process.
-May, 2019:
Trade talks fall apart as China tried to renegotiate on various measures.
US increased tariff rate from 10% to 25% on chinese goods worth $200 billion. As retaliation China increased tariffs to 25% on american goods worth $60 billion.
-June, 2019:
Presidents of both the countries met on the sidelines of the G20 summit in Japan.
“We’re holding on tariffs, and they’re going to buy farm product,” Trump said at a press conference after the summit.
“We mentioned Huawei. I said we’ll have to save that until the very end,” Trump said. “One of the things I will allow, however, is — a lot of people are surprised we send and we sell to Huawei a tremendous amount of product that goes into a lot of the various things that they make — and I said that that’s OK, that we will keep selling that product.”
Though it looks as if both the countries have come to truce and that trade war will soon get over, many experts believe that its Trump’s diplomatic style to show that everything has been sorted out which in shock later worsens.
Donald Trump’s presidency has robbed from world its stability, financial markets are going haywire ,small businesses are confused , big corporations are summing up losses. Trump’s go alone attitude is creating differences and inadvertently endorsing protectionism. Thanks to his leadership maintaining cordial diplomatic relationship with United States has become tougher than ev
Even the effectiveness global groupings such as G-7,G-20 and NATO are being questioned as they now are being rendered ineffective without US leadership.
Trade war though from domestic point of view is in favour of US’s national interest. It will help US revive its agricultural economy and bring back MNCs that had moved their manufacturing bases to developing countries. More importantly it was important for the US to stop China from becoming the largest economy which in some manner it has partially achieved.
Also back at US it is the only way through which Donald Trump could get re-elected by bringing back manufacturing to the US and adding jobs for the local workforce-his definition of making America great again.
In my opinion what he cannot foresee is the moving manufacturing to US will make MNCs lose their competitive advantage of cheap production, in the end losing business battle to other companies based in other countries.
World at this point of time is going through something completely staggering - there is sudden turn in the notion of development through liberalization,a concept which now has few believers. There was a time when non liberalised countries were asked to open up their economies in return for any financial assistance they needed from international organisations such as IMF but now the countries are turning towards protectionism. Does this indicate that notion of development through liberalisation was flawed? Does this mean that Liberalisation can be dangerous too? If yes, then why was protectionism potrayed as a wrong concept? Do Comment.