America v China: why the trade war won’t end soon | The Economist

The world’s leading superpowers are locking horns Game on here, trade war between the US and China is here Over the past 16 months America and China have been trading blows… …through tariffs on goods We are looking at a reality that has a 25% tariff on every single product… …that would come in from China The impact is being felt on industries worldwide But what is the story behind the America-China trade war? So the trade war, what have you guys been looking at? The US doesn’t like that China is growing so fast… …and set to overtake America as the biggest economy in the world… …if it hasn’t already by certain measures Basically China and the US are caught in this race… …of imposing tariffs on each other So the US slaps a high tariff on certain products then China retaliates It’s multiple industries across multiple markets, it’s huge And I think right now would be a really good time to look at what’s happened… …how it could impact the world from now on At The Economist, we’ve been covering the trade war extensively Soumaya Keynes is our trade and globalisation editor… …based in Washington, DC How did this whole trade war kick off? How did this whole trade war start? For a long time there have been frustrations that… …past American administrations had with the Chinese On the 2016 presidential campaign trail… …you started to see some really tough rhetoric We can’t continue to allow China to rape our country… …and that’s what they’re doing And so he gets into office, his United States Trade Representative… …that’s the kind of official trade negotiator… …they’re working on this big report So they’re essentially investigating China’s economic practices Essentially the question they’re asking is… …has China done anything that would frustrate America’s economic interests? And they find surprise, surprise—yes How long a history is there of these complaints the US has about China? These concerns go back for a really long time And I think to understand them properly… …you really need to go way back to the expectations that people had… …when China was thinking about entering the World Trade Organisation China’s economic rise has been dramatic In 1978 China’s GDP at market prices was just 6% of America’s Last year it had grown to 66% When considering local spending power… …China has already overtaken America This unprecedented growth began with President Deng Xiaoping He started opening up China’s economy to the world in 1978… …and the country quickly became “the world’s factory” Over the next decade, exports as a share of GDP tripled… …and by 1988 15% of China’s exports went to America The World Trade Organisation opened its doors to China in 2001 And it was America that ushered it in Bringing China into the WTO is a win-win decision It will protect our prosperity and it will promote… …the right kind of change in China After joining the WTO, China became an economic superpower But people had expected the country to also become… …more like a Western capitalist economy That didn’t happen America now claims that China achieved its growth by not playing fair Are those claims justified? To find out the answer, I spoke with David Rennie… …he’s our Beijing bureau chief There’s two ways in which China certainly hasn’t been playing fair One way is just that China treats Chinese companies differently So, if you are a Western business… …your Chinese competitor not only has better market access… …but maybe the land that it built its factory on was given for free… …maybe it got a giant tax break …China just doesn’t have a level playing field There’s then the really dirty stuff: stealing foreign companies’ technology If you asked Chinese officials about the accusation that… …China is stealing its way to the top… …they will say, well hang on, America steals secrets too So why are you coming after us? The American government will tell you sure, they spy and they steal stuff… …but never for commercial purposes With Donald Trump’s election in 2016… …you had a president who actually set about getting tough with China… …once he was in office and we never really had that before The Trump administration has been using tariffs… …or taxes on imported goods… …to try to force the Chinese to change their ways In July 2018 America imposed tariffs of 25%… …on $34bn worth of Chinese products That almost doubled the average tariff rate on Chinese imports… …from 3.8% to 6.7% And it’s American firms that have to pay that tax But with every increase from America, came an increase from China Since the start of the trade war… …China has more than doubled its average tariff rate America’s has tripled The fight has become overtly political… …because China’s tariffs are hitting President Trump’s voter base Many counties where Trump won in the 2016 election were here… …in the Great Plains… …and these are the counties most affected by China’s tariffs Someone who knows all about the impact… …tariffs are having beyond the data… …is Chad Bown from the Peterson Institute for International Economics He’s been analysing international trade for decades… …but the trade war has put his research in the spotlight Some people have referred to it as my World Cup or my Super Bowl It’s something I’ve been studying in the background for 20 years And now all of a sudden the world seems to be interested in this What role do tariffs play in a trade war? Tariffs are basically a tax… …but it’s a tax that’s only paid for goods that are produced… …outside of the country, in a specific place One of the things that China has done in its tariffs is… …it’s imposed really high tariffs on American exports of soyabeans This is a huge product that farmers in Iowa and across the Midwest… …grow only to sell to China So, how are these tariffs and… …the trade war impacting the wider world economy? I think at some level we’re seeing the decisions that businesses make… …be affected by this Nowadays, they’re not sure what markets are going to be open to them… …in the future and that’s going to impact their investment decisions The International Monetary Fund, the IMF… …they expect economic growth to be a lot lower in the future… …because of the tensions arising during the trade war The global economy is slowing down… …and everybody’s increasingly concerned about that As things stand now, a ceasefire in the trade war could be drawing near The two leaders are hoping to agree on a “phase one” deal soon… The two leaders are hoping to agree on a “phase one” deal soon… …which could mean some tariffs being lifted The Trump administration wants China to buy more American produce… …and tighten up their intellectual property rules If that phase one deal is signed… …will it be the beginning of the end of the trade war? I took that question back to Soumaya The Americans are hugely ambitious for the kinds of changes… …that they would want from the Chinese but… …those ambitions I don’t think will be reflected… …in the preliminary phase one deal The Chinese government wants its economy to do well… …wants its citizens to get richer The extent that the Americans persist in demanding these big changes… …to the Chinese economy, it’s going to be really difficult to get a deal Even if there is a phase one deal… …there will be a lot of issues still to be resolved But there’s more to the trade war than just tariffs America has also imposed restrictions on some Chinese firms… …especially ones in the tech industry We cannot allow any other country to outcompete the United States… …in this powerful industry of the future Specifically over one Chinese company Huawei can offer cheaper prices… …because they are heavily subsidised by the Chinese government We’ve made another film that looks closely at Huawei… …and why the West is worried about it It includes a rare interview with Huawei’s CEO Ren Zhengfei I do not really understand America’s political motivation And we looked into how these tensions will impact American industries… …already dependent on Huawei technology The biggest issue, I think, with all of this political turmoil… …surrounding the Huawei name is uncertainty You can watch the Huawei film right now by clicking on the link opposite If you want to learn more about the trade war you can click the other link… …where you’ll find all the research we used to make this film… …as well as other articles we’ve written… …including a special report by David Rennie And as always if you like what you saw, hit that subscribe button

100 thoughts on “America v China: why the trade war won’t end soon | The Economist

  1. Great propaganda…..US started the trade war with China and China is to be blamed. Aren't there other ways to resolve whatever grievances US has instead of the no win destructive trade wars?

  2. The Chinese work 9-9-6, and they are smarter. The US works much less, watches more sports. China work for all. US works for the rich. US has spent Trillions on endless wars, China built infrastructure.

  3. BS channel. The corporations gave the tech up themselves for access to the markets and cheap labor, China didn't have to steal much, they just had to perfect it. Blame your greedy corporations you fk tards.

  4. Americans are scared now..
    Because they can see China a huge market and there ambitions
    Such an loser country America is ..
    They just talk bulshit. And hardwork they don't know

  5. Boeing and Lockheed Martin are heavily subsidized by US taxpayer money and no one complains. Just look at how many jets the US buys each year with that defense budget.

  6. China economy is in deep trouble exacerbated by the trade war. President Trump is right, China need trade deal more than US.

  7. this world is run by goblist billion aires they dont care about  countries or people . they have just got richer .  if there is a big war they don't care  they make more money
    when a factory is closed the workers suffer familys suffers,when they open a factory those people win jobs labor cost goes down .the rich get richer. its about greed.

  8. I am surprised that many people still think that China has stolen a large amount of technology from the United States, but they do not know that technology transfer is written in the contract. This is also the condition for China to allow many foreign companies to settle in and to grant a lot of concessions.

  9. How can you prove that China steal foreign companies' technology?! Did you share your FPGA's technology publicly? Did you even sell your F35 to China?

  10. The US sold their technology to China. The US took the money for their intellectual properties so they cannot complain if this is used to further their positions. Nobody explained it here properly

  11. I personally only want China to be more friendly. I also think we should do more to help welcome them into the community instead of alienating them. We can all get along on all sides. China is just like America in the sense of having to be #1 at everything, that's not bad, but we can't blame them for advancing their economy and doing whatever they have to do to ensure it. Let's just stop this bs cause in the end, it only made the original problem a lot worse.

  12. Are American willing to admit and correct their mistakes ?

    3,000 years ago ,

    The Great Chinese Philospher Confucius says it shows great courge for one to admit fault and show remorse

  13. It’s more that we in the US on trumps side feel China has more or less been ripping off the US, so we just want fair trade.

  14. … in so many words, the United States really need to practice being the united states of America. All of the people should be successful, but repression ruled the nation. 1/1/2020 12:00AM

  15. What a load of waffle. China is not a third world country. It is the second most productive country in the world. It undercuts prices and creates international unemployment. Get real get rid of China.

  16. Why does US keep saying the Chinese gov subsidizes their imports to US? If this is true all the time, then China’s gov will lose so much money that China will become very poor, not getting so rich as they are now.

  17. American China should not have been trading to begin with only the globalist greed wanted this trade and to manipulate the masses and the millions

  18. China has all these glitzy cities and skyscrapers because of our traitorous democrats they gave away large sections of our economy to that 1 party authortarian state

  19. The problem is American farmers should not be growing in exporting soy beans we have a food desert problem in this country in are especially our cities and these farmers need to be producing fresh greens fruits and vegetables to feed the American people with a healthy diet.

  20. CCP only non-stop print RMB freely in exchange to HKD to USD then buy overseas properties and goods, RMB actually is empty. I do not understand why US government would sign the trade deal with China because RMB is not worth of anything if CCP keeps printing more and more RMB.

  21. US have spent almost everything for Israel in middle east …
    And China out of US sight, weakening US economy
    In this case … only Trump doing real action against China

  22. 4:24 America never steal stuff for commercial purposes? What about all the Oil and Opuim they 'took' (still taking) from Iraq and Afghanistan? 😁💯

  23. It’s true. The Chinese steal ideas and commercialize to a large scale. I know. I’m Chinese and seen it in China. It’s also ingrained down to each individual; in the culture. It’s all about self survival. Children are not taught the same moral practices as in the West when to playing fair. If they can cheat, they will cheat. If they can cut corners they will cut corners. Integrity is a foreign concept especially to the elders who are teaching the next gen of Chinese children. I see this in my Mainland Chinese mother in law. She makes white lies to save face and saving face is so important in China.

  24. The us president comprised to Alien. Stealing their technologies and allow them to kidnap American citizens . How about that?

  25. Anybody can do what the Chinese has done but it’s not the real issue here. The real issue is the fact that one race wanted to be supreme over others period. China didn’t do anything wrong. They just outsmarted this race I’m talking about and redo what these westerners had done to most of the world before. To be continued

  26. The trade war started because China has been robbing us for a long time. Why do democrats hate and lie on America so much??

  27. The tariffs are just a huge tax increase in disguise. Cause who are paying them? Not China, but American companies and ordinary citizens, into the US' public coffers, spent on extravagant tax breaks for the already super rich and insane corporate welfare for the armament industry. China might lose a bit market share, but not very much – they have other customers, and huge surpluses on their trade balance.
    Republicans = more taxes for the American people…

  28. Usa have caused only destruction in this world but China have helped this world by providing affordable goods and stuff

  29. There isn't china's voice. I will defend the "Market for Technology" policy, when one country has no money, no technologies, no products, market access is their only power to bargain and get the technology. Technology transfer is vital to help developing countries get a better position in the global value chain.

  30. U.S.-China military confrontation is the last resort. I believe that a continued U.S.-China trade war is the best policy. Only tariff increases can accelerate the withdrawal of foreign capital from China. The Chinese economy without foreign capital will collapse, and China's economic recession will not be able to enhance its defense capabilities.

  31. Stealing technology reminds me of plagiarism; which everyday people do all the time and they may prefer to call it collaboration instead. Being on YouTube actually facilitates and promotes such activities; since the moment a video shared; an idea is shared across the globe to different audiences that could all leave their mark; expressing their opinions in a form of a comment.

  32. They not steal they have idea to make the country best of the best maybe will become the first Asian country that beat USA. The economic will biggest double USA economy

  33. I can't help but wonder if a new trade deal will have any kind of effect on our economy, whether it is now or in the future. If prices of Chinese products increase, manufactures will not come back here but simply move to another cheap labor country like Vietnam, Thailand and such. Aside from that, the new deal suggests China being required to buy $280 billion worth of american goods over the next 2 years, however it doesn't include removing the tariffs that are in place which are around $250 billion. So the two will balance each other out and the result is zero growth on our side. So I'm not expecting much to come from this, except this being a tool for Trump to get reelected in 2020. In my opinion, the only thing that will fix our economic problems in the long run, is a change in consumer attitude. Meaning we need to change our way of life. We need to change the way we shop and pay attention to where stuff comes from that we buy, buy only products that are Made In USA and boycott everything else. Thereby forcing manufacturers to start producing here again. Force our politicians to make doing business easier and cheaper here, particularly for small business which employs more that 70% of the American workforce. Put new regulations in place that will restrict the big banks and Wall Street. Traditionally we Americans look for the "quick fix" and the momentary gains which is an illusion, there is no quick fix. A quick fix is like taking Tylenol for the pain caused by a tumor.

  34. A weak report.
    You also must said that huawei is now an innovative company that surpassed any other company in 5G network. Trump feared huawei's innovations but they said to news that Huawei want to spy on US(without showing any evidence). But what I know is that it was White House that is spying on while the world from decades ago (even its allies, EU), and its evidences are publicly available on Wikileaks

  35. China has been at war with the US for 20 years,America is going to block access to the only market that matters!!!The American market! 🙂

    As the old developed world and China enters a demographic/economic death spiral!!

    Trump is breaking China's back,as China losses market share to other low cost exporters!!!!!!!!!!!!!!

    Trump is the Voice of the Heartland!!!!

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