According to the available data in 2017, the U.S. had $336 billion trade deficit with China. The U.S. and China are the world’s first and second largest economies in terms of GDP. The U.S.-China trade war is one of the biggest ongoing economic conflicts. This conflict was initiated by President Donald Trump, who increased sanctions on Chinese goods from 10% to 25%. Some of the top U.S. exports to China were aircraft, soybeans, microchips, motor vehicles etc.
President Donald Trump’s main motive is to increase sanctions on Chinese goods so that Chinese imports will make U.S. a much stronger and richer nation all over the world. In March last year, President Trump had imposed tariffs hikes of up to 25% on $250 billion worth of Chinese goods. China, the second-largest economy in the world imposed tariffs on about $110 billion of American goods, in what can be called a tit for tat situation.
The U.S. had also tried to restrict China’s Hi-Tech industries, with U.S. tariffs throwing millions of Chinese workers out of jobs. Clearly, after decades of rapid development, China is still grappling with slowing growth pace and weaker business sections.
Due to the U.S.-China trade war, Hong Kong’s export would suffer its largest decline. The trade war has affected not only Hong Kong’s exports to the U.S. but also other markets such as Taiwan, Japan, Vietnam, etc.
The trade war talks between the two countries collapsed due to a difference in opinions. One of the trade practices which the U.S. claims to be unfair is the theft of intellectual property through the forced transfer of American technology to the Chinese. After the failure of the recent trade talks, both countries are preparing for trade talks in Washington in October.
If the U.S.-China relationship breaks down, it will also end up hurting the world’s economy badly— because they are important pillars of the global economy.