US–China Trade War
The United States began imposing tariffs on Chinese goods in 2018 under Section 301 of its trade law, following an investigation that found China had engaged in forced technology transfer, discriminatory licensing and cyber-enabled theft of intellectual property. The first measures in July covered $34 billion of imports at 25 per cent. China retaliated within hours, matched dollar for dollar, and targeted American soybeans, which hit farming states that had voted for Donald Trump. Rounds escalated through 2018 and 2019 until roughly two-thirds of Chinese exports to the United States and most American exports to China carried additional duties. Separately, the administration moved against Huawei, placing it on the entity list in May 2019 and cutting it off from American semiconductors and from Google's Android services, and pressed allies to exclude it from 5G networks. Canada arrested its chief financial officer on an American warrant in December 2018. The Phase One agreement of January 2020 suspended further escalation, with China committing to buy an additional $200 billion of American goods over two years. It bought well under half of it, and the pandemic intervened. Most economic studies found the tariff cost fell largely on American importers and consumers rather than on Chinese exporters, and that the bilateral deficit shifted to Vietnam and Mexico rather than disappearing. The tariffs were kept by the Biden administration and extended to electric vehicles, batteries and solar cells, which marks the durable change: bipartisan acceptance that the engagement policy of 2001 had ended. Export controls on advanced semiconductors and chipmaking equipment, imposed from 2022, went considerably further than any tariff. The relationship has since been described on both sides as strategic competition rather than trade friction.
- Category: Economic
