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  • Minsuh Kwak

Is the US- China Trade War being Resumed?

The famous chengyu (an ancient Chinese idiomatic expression) “弱肉强食,” directly translates to “the strong prey on the weak.” From Ancient Greece, all the way up to the 21st century, hitherto politics was a cycle of strong nations ruling weak nations. Nations across the world now focus on reinforcing national defense and creating political alliances to protect themselves in the wild jungle of modern politics.

Historically, as the United States emerged as a world power, the US have kept in check the potential threats to their dominance in the world. The 20th century rival of the United States was the Soviet Union. The Cold War was a complicated competition between the US and the USSR; they endeavored to conquer each other in the fields of technological progression, economic stability, and most importantly: military power. The US was able to achieve victory in the Cold War after the collapse of the Soviet Union in 1991. However, as of the 21st century, a nation rapidly emerged and claimed the title of second highest GDP in the world, which now imposes a threat on the United States’s hegemony in the world: China.

“The growth of the power of Athens, and the alarm which this inspired in Sparta, made war inevitable”-- the famous quote from Thucydides. Politicians often refer to the “Thucydides Trap” when explaining the trade war between the U.S. and China. The basic theory is that a dominating country will always try to suppress the other challenging country to maintain its hegemony. This can be applied to the United States-China trade war, which indicates that collision between the two countries is inevitable. Political scientist Graham T. Allison questions in his book “Destined for War.” whether the U.S. and China will be able resolve the conflict and “escape” the Thucydides Trap.

After Donald Trump took power in the White House, Trump terminated or revised many contracts that he saw were disadvantageous to the US economy; this did not solely target China, it targeted many other countries as well. Such were the withdrawal from the TPP and amendment on NAFTA. Many political analysts agree that the start of the war was initiated by these protectionism policies. Starting from 2018, the US began to accelerate applying pressure to China. According to the 2017 United States Census Bureau, China occupied around 47.1% in all trade deficits of the United States. Trump started to implement removal of all hitherto unfair trade practices that he believed China has done, including currency manipulation, mass production, and illegal subsidies.

On July 6th of 2018, the US government imposed a 25% tariff on 34 billion dollars worth of Chinese imported goods. As a counter tariff, China imposed a 25% tariff on 34 billions dollars worth of US imported goods as well. Furthermore, from August 8th of 2018, both countries impose an additional 25% on 16 billion dollars worth of imported goods. Both countries simultaneously imposed tariffs on each other: an eye for an eye. The immediate outcomes were bad for both countries. Around 5 million companies in China went bankrupt just in the first half of 2018. Experts suggest that China received more economic damage than the U.S.; this was partially due to the fact that China exported more of its goods to the US than the amount they imported from the US. Nevertheless, the US as well will inevitably experience a substantial economic damage from the trade war; consumer good prices will increase and affect millions of people in the U.S. This will be the same, if not more for China, as previously stated, China is more dependent on exporting goods to the US. Finally, both countries agreed to stop imposing additional tariffs, provided that previous tariffs are not withdrawn. This was the first and the most recent agreement that they made.

With 2020 being hit by an unexpected worldwide pandemic, the agreement has been stagnated since. With the COVID-19 affecting the world economy at a large scale, the issue between China and the US has been resurfaced. Moreover, Trump’s recent demand for investigation on China regarding the COVID-19 is sparking renewed discussion about relations between the United States and China. With caution, we hope that a reasonable agreement between the two countries can be swiftly made to resolve the conflict.

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