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 comments

  1. Full of false accusation without ground. We can also say America is not playing fair by using economic sanction as a tool, and by using US internal laws over international businesses!

  2. There're something more valuable than money, like democracy, freedom and human rights. This is how China achieve its current state of development, we lost all these invaluable treasures while most of the money earned went into the pockets of those corrupt politicians. We, Chinese people, never feel the growth that much actually. Housing became unaffordable, inflation skyrocketed, even pork became rare on the dinning table. China can never take over America as the world's biggest and most powerful country. Those have power are fleeing to the US, those with money are buying their way into the US, those with neither power nor money are smuggling their way into the US. How can a nation like this can ever achieve revival? What is facing us , Chinese, is the prospect of a social collapse, where cyberpunk will become a reality, not a strong nation promised by our dictator.

  3. No trade deal with Communist China – they steal everything, black market American products, kink agreements, and bribery are all standard practice. Zzzzz.

  4. You must let the American public know how the communist chinese have been conducting economic warfare aganist The American public and you all will see the United States of America Rise up.And defend this land we love.

  5. There is no necessity for huawei to receive subsidies from Beijing! Why? Their revenue, profit and cash flow are self sustaining!!! Although they are not listed, but their accounting is audited by international auditor!! Therefore, your claim of huawei receiving subsidies is incorrect!! And the IP "theft" accusation is Trump's rhetoric… and were NEVER found in any court of law, including the US !!!!! To date, all accusations, levelled against Huawei are by lips and not by evident !!!!

  6. Lol Trump's is winning in those states and is about to flip states that Hillary won 😂😂😂 and unemployed rate at it's lowest since 1960 he created more than 6 million jobs in ,3 years the economy is actually starting to boom

  7. This is a one sided report.
    The David guy says that China steals intellectual property. But:

    1 The companies going in China sign to sharing the technology.
    2 the intellectual property cases have been either thrown out or not proven so far.

    I'm not pro China, but all facts must be taken into account

  8. Politicians did what Corporate wanted….which was be allowed to move most factories their and other countries….they charge nearly the same price for goods back to the us and reap the rewards of more profits….now manufacturing is at a all time low …and now we're a service economy ….Wendy's McDonald's etc…working one job to now working three jobs ….no pensions….no medical ….thanks to your politicians…dems republicans all laughing on the hill …..

  9. Fiction news all people who participate are white so they play the role of overwhelming Chinese reputation. ultimately, in infrequency term of race white standard prioritisation in reliability on white race whereas avarice of isolation of enormous oneself flourished.

  10. ارجوكم🙏🇮🇶🙏🙏🙏😭بلدي ينزف الشباب تقتل بدون ذنب العراق ينذبح ارجوكم اوصلووو صوتي بلدي العراق ينزف 😭🇮🇶🙏😭🙏🙏🙏🙏🇮🇶🇮🇶🇮🇶🇮🇶

  11. China is not mentioned by jesus, Christianity, judaism and islam and not in Harmageddon prophesy. Why? probably because the empire will probably fall very soon,

  12. trump hate china because china never buy anyrhing from usa,they caculative and keep their money tightly.nobody like china because they are selfish and never spend at all.usa will tight you

  13. China is 24 years more advanced than the USA… We got rid of the house of technology in 1995… We must have thought we invented everything by then

  14. Can't steal something their clearly more advanced at in the first place… This is like scapegoating Mexicans on taking our jobs when it's clearly automation

  15. WszechPolak CWP Chny to stara cywilizacja i Mondrzy Ludzie A w Ameryce Północnej łazili na drzewach i W jaskiniach a Chińczycy w domach USA nie ma szans z Chnani ani w rywalizacji gospodarce i militarne smok spali Jastrzębia

  16. 中国正在日益强大 我相信中国将在不久的将来实现伟大复兴。for America,i have not power to review it.but i want to advise the goverment to see the situation.China is friend,is not enemy for the world.

  17. Trump did admit that China is growing fast and are on the rise at all levels of development. And he also admit that he wants to change America approached with China and move America away from U.S/China relationships in a new ways.

  18. Well, the tariffs are causing restructuring of the supply chain. Moving production OUT of China…. Get it? It is a death spiral for China!

  19. how can you seriously say that when America steals IP from China "it is not for commercial gain"?!?! uh, why is America stealing IP from China? why is America (comrade trumpMarxistovic) subsidizing various industries in the USA at historical record levels? why is America giving favorable tax status to select corporations but demanding that China not do so?

  20. USA is the 2nd place country on earth and we are soon to be #3 when India takes over the #2 spot. This is due to comrade trumpsubsidyski and his welfare payments to agri-business corporations and various other industries, amassing historical fed deficit, & slowing the economic growth of USA to 1.7% (as well as the rest of the world).

  21. When you out-source jobs to exploit cheaper labor markets for short term profits, you lose control of your technology and in the long run, you lose the cutting edge needed to catch up. Thank you Wall St.

  22. Baizuo (white left) – “only care about topics such as immigration, minorities, LGBT and the environment” and “have no sense of real problems in the real world”; they are hypocritical humanitarians who advocate for peace and equality only to “satisfy their own feeling of moral superiority”; they are “obsessed with political correctness” to the extent that they “tolerate backwards Islamic values for the sake of multiculturalism”; they believe in the welfare state that “benefits only the idle and the free riders”; they are the “ignorant and arrogant westerners” who “pity the rest of the world and think they are saviours”

  23. Take a walk through China and the United States and discover that China is much more advanced and modern than the United States

  24. Clinton as usual was totally wrong about China and the WTO he was wrong about many things and as it turned out he was just trying to pad his bank account at the peoples expense…he was terrible and his old lady Hillary scary thing that she was, had she been elected America would be a ghost town….these greedy self righteous psychopaths only think of themselves and other greedy corporate elites who only see profit as a means to exist in the world. At the same time they blame pollution and a declining earth on the public when it is them that have caused the loss of our ecosystems.

  25. The US should look to itself. Americans consider China and Russia as their only threats. One day, the EU will become an economic presence also.

  26. China and USA are not equal. China is just force to take responsibilities . The USA build China and the USA needs to hold China responsible because China does not have a system of check and balance .

    We can forget about China if USA decides to fight China just by removing its manufacturing units from China then China is gone

  27. USA we can call Sea locked country.Most of the country away from USA. So no need to USA in Asia,Africa,Middle east,Europe.Forget USA

  28. Facebook helped oppressive governments identify people who posted criticism of the anti- freedom dictatorships/religion………so that Facebook could continue to access that population….. America should have taken control over any corporation that helps oppressive governments that abused basic human rights……..oh wait…our 1% has done that thoughout the Americas…..were hypocritics….having no moral ground to hold any one or any country to any standard of decency…..

  29. It is time to reduce the volume of trade with China .China cannot be capitalist and communist at the same time .The world must be free and not to be under dictatorship from anybody.

  30. To bad this is just hurting Americans and not china. How Chinese no longer do business with American companies they now manufacture and use smaller countries like Vietnam to ship their products to america so they by pass the tariffs. Since america is playing by the rules and china isnt america will only hurt the longer it goes china isnt even flinching. If we want to beat them where it hurts we must automate all manufacturing leaving china bringing more higher paying jobs to America and lowering prices our selves. Doing this will make china crumble how we no longer import $500 billion of china trade which is 15% of Chinas entire trade as well we no longer manufacture in china so they lose money there too. American manufacturing companies contribute 20 – 30% of chinas entire gdp from manufacturing. Cut trade automate manufacturing or moving else where will bring china to its knees, bring millions of high paying jobs to America and strengthen new ties with other nations as we move manufacturing to them like in mexico or Africa.

  31. Because even though China is maybe the second most powerful country right now that spends billions on fake islands (in other peoples waters ) spends billions on space exploration .spends billions on expanding its empire, spends billions on military, spends billions on dodgy loans to poor countries etc
    they still claim they are a developing country that needs special deals and discounts on trade .But now the US has said no more special treatment they are a rich country not a developing country so they now have to abide by the same rules as the other richer countries .

  32. Can not understand why the western always being so arrogant and not willing to take the fact of China become stronger.

  33. China-imposes tariffs on US goods, makes It hard to do business in China, pressures US corporation to submit to the one party ideology and steal IP for DECADES
    US- we going to start imposing Tariffs back
    China-you just want to topple are economy!!!
    Not a Trump supporter but I’ll support him on this. It’s a no brainer

  34. Lets take a look in comparison:

    China: No Human Rights

    USA: Lots of Human rights

    Leftists cannot defend china unless they wanna sound like Hypocrits.

  35. what we are seeing, looking at the stock and bond market is how much we dont need china F,ing us anymore.a year ago the libtards said the world is going to end because trump put pressure on china.the sky hasnt fallen yet,chicken little.

  36. Americans are really brainless, I can't believe I wasted my time watching this garbage video with nothing but biased politics.

  37. Why should China play fair? Is it not right for a country to support her own industries? For China to give breaks to her own companies is in the interest of the Chinese people. All's fair in a game of greed; that's what capitalism preaches, no? I don't blame China for doing what she does for the furthering of her own interests.

  38. whats happening is they are still trading but both are just taxing the poeple and they dont want you to know ..think about it the rest is kust noise to destract

  39. “China wants to get its citizens richer” ?? Do you even know anything about China my dude? This video is missing a lot of of insight..

  40. "….sure they steal and they spy, but never for commercial purpose….". They steal and spy to knock you out…. this is the stealing and spying by the US. Typically a Hypocrite.

  41. Is it a sin to get richer … is it only American can get rich? Is it wrong, it China is doing better economically and if does, then the US will deal with China squarely, like they did to Japan and France. Typically a hypocrite.

  42. As honest as Trump said that The United States can't allow any other countries to outcompete itself in all industries and fields, thus whoever challenges its position in the world would face penalties, like imposing tariffs, or even resorting to direct military confrontation.

  43. Absolutely, the American people need to think why their great presidents spent money on war rather than developing economy.

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