FINC paper Camelia.pdf - Student Name: Camelia Antoci...

Student Name: Camelia Antoci Student ID:
1264346
FINC 301 Term Project
Instructions (Please read carefully):
1. Please be sure to fill in your name and ID number on top of the front page.
2. Write-up submission deadline: Friday, Dec 3 rd , 2021 .

The U.S. - China Trade War
The United States and China are destined for rivalry. They are the two most
powerful countries globally, and they have very different visions about how the world
should operate. The trade war between these two superpowers began in 2018 under the
administration of US President Donald Trump. The main reason for this financial conflict
is that even though China is America’s leading trading partner, the goods and services
imported from China are considerably higher than those exported. According to The
Office of the United States Trade Representative, China exported almost $558 billion of
goods and services while the US exported $185 billion. We can easily observe that there
is a huge trade imbalance.
The US administration decided to end this imbalance by imposing tariffs and other
trade barriers. On July 6, 2017, the US-China trade war began as the US imposed 25
percent tariffs on US$34 billion worth of Chinese imports. Before the trade war, U.S. tariffs
on Chinese goods were on average 3.1% in early 2018, whil e China’s tariffs on American
goods were at 8%, the data showed. (U.S. tariffs on Chinese goods stood at an average
of 19.3% on a trade-weighted basis in early 2021, while Chinese tariffs on American
products were at about 20.7%, according to data compiled by think tank Peterson Institute
for International Economics earlier this year.) The
The American government could not simply forbid import from China as the US
depends on some Chinese goods and products whose cost is significantly lower than

those from different countries. As per Ryan Hass and Abraham Denmark, “Trump laid out
a four-part plan to secure a better deal with China: declare China a currency manipulator;
confront China on intellectual property and forced technology transfer concerns; end
China’s use of export subsidies and lax labor and environmental standards; and lower
America’s corporate tax rate to make U.S. manufacturing more competitive.”
The first steps to improve the relationship between the U.S. and China
Even after the aggressive politics of Trump ended and a new government of Biden
took over, those tariffs remain. Although relations have not significantly improved, a
phase-one trade deal between the two sides was signed in January 2020. The Phase
One trade deal was meant to be the first step in concluding the problem with the tariffs
imposed on the Chinese government. However, the issues persist as a new global crisis
arrives- Covid-19. The trade was left in the shadow, “used only to highlight China’s
inability to meet the conditions of the deal to purchase an additional $200 billion in
American products over the 2017 level through 2021 due to the disruption from the
pandemic.” (Sara Hsu )
There were multiple talks and negotiations since president Biden took over the
White House to address the Trade War, but no profound changes were made.