LITERATURE REVIEW AND THEORETICAL FRAMEWORK
Definition
International Political Economy (IPE) examines the interplay between political and economic factors on a global scale Political economists typically focus on two key areas: first, how political decisions limit economic options for governments and social groups; and second, how economic dynamics influence political behaviors, including voting patterns, lobbying efforts by unions and firms, and the formulation of governmental policies.
The European Union's agricultural policies exemplify a protective approach to domestic farming, limiting trade in agricultural products This resistance to trade liberalization, advocated by agricultural exporting nations, may be influenced by the strong organization of farm lobbies, urban consumers' empathy for national farmers, and a broader desire to preserve national identity and way of life.
“food security,” or perhaps other factors The political economist’s task is to investigate which of these factors matter in explaining the EU’s stance in negotiations over trade in agriculture.
Growing financial integration between countries has limited the political choices of left-of-center governments more than their right-of-center counterparts This integration allows capital to flow to the most favorable investment environments, raising concerns about capital flight As a result, left-of-center leaders like Brazil’s President Lula and Britain’s Gordon Brown may adopt conservative economic policies to calm anxious investors Such policies often include commitments to fiscal balance, reducing taxes on capital, and delegating monetary policy to independent and conservative central banks.
Recent inquiries among political economists focus on whether financial markets systematically penalize left-wing financial policies and if the alleged shift in policy by leftist leaders is a myth If this shift is indeed real, it's essential to explore whether factors beyond capital mobility are influencing it.
Understanding the interaction between politics and economics is crucial, as economic outcomes significantly influence political opinions and power dynamics Wealth distribution affects individuals' political preferences, and economic policies are often politicized due to their varying impacts on wealth allocation Political power enables groups to modify wealth production and distribution, while wealth itself serves as a tool for gaining political influence Although the pursuit of wealth is not the sole motivator in human behavior, it plays a vital role in achieving broader goals Ultimately, the interplay between economic and political factors shapes societal resource distribution.
A trade war occurs when a country addresses a trade imbalance by increasing import tariffs on goods and services from other nations This tariff acts as a reciprocal tax; for instance, if Country A imposes a tariff on sugar imported from Country B, Country B faces higher costs to sell its sugar in Country A In response, Country B may raise its sugar prices, ultimately making it costlier for companies in Country A to utilize Country B's sugar in their products.
Countries can implement various measures beyond tariffs to restrict imports from foreign companies, leading to the concept of a unilateral trade war A notable example is the long-standing trade conflict between the United States and Japan, where the U.S imposed tariffs on certain products, including vehicles, while Japan has not retaliated.
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Trade wars fundamentally arise from protectionist government policies that restrict free and fair international trade Countries often adopt these protectionist measures for two primary reasons: to safeguard domestic industries from foreign competition and to protect jobs within their borders.
• To protect domestic businesses and jobs from foreign competition
• To balance a trade deficit (for example when one country’s imports exceed the amount of its exports)
Methodology
This article explores the US-China trade war and its significant effects on the global political economy, focusing on three key perspectives and analyzing it through four distinct levels based on various structural frameworks.
1.2.1 Three main perspectives in IPE
The three dominant perspectives of International Political Economy (IPE) are economic liberalism, mercantilism, and structuralism, each emphasizing the relationships among various actors and institutions Mercantilism was prevalent from the sixteenth century until the late eighteenth century, as noted by Balaam & Dillman (2012) In the 18th century, liberalism emerged as the primary perspective and continued to dominate throughout the 19th century Meanwhile, structuralism also developed in the 19th century and gained significant utilization during that time.
Mercantilism, also known as economic nationalism or statism, is the oldest approach in International Political Economy (IPE) and parallels the realist perspective in mainstream international relations It adopts an anarchical worldview, asserting that states prioritize survival and seek universal dominance Additionally, mercantilism emphasizes the close relationship between power and wealth, suggesting that the accumulation of wealth enhances a state's power Ultimately, it posits that the state serves as the primary means for individuals to achieve their economic objectives.
To achieve security and prosperity, economic policy must focus on generating wealth and power, which are essential for enhancing the state's independence and national security (Balaam & Veseth, 1996).
Mercantilism views the acquisition of power and wealth as a zero-sum game, where one nation's gain directly results in another's loss In this framework, market dynamics are heavily influenced by political authority, leading to the subordination of economic activities to political aims and objectives.
The liberal approach is heavily influenced by economic theories, particularly the concepts of comparative advantage, supply and demand, and market operations (O'Brien & Williams, 2004; Burchill, 2005; Gill & Law).
Liberalism presents an idealistic worldview that contrasts with mercantilism, emphasizing cooperation over coercion in human interactions It views these interactions as a positive sum game, where all parties benefit This perspective prioritizes individual freedom and the creation of wealth through free markets, asserting that individuals pursuing their self-interests ultimately enhance societal economic exchange.
Liberalism posits that collaboration among individuals and nations minimizes the likelihood of violent conflicts, as trade and foreign investments weaken the influence of war-driven elites while fostering unity among citizens across different nations in a shared, peaceful endeavor.
Liberalism traditionally exhibits skepticism towards the state, viewing it as a barrier to individual entrepreneurship and market efficiency Eighteenth-century thinkers like Smith and Ricardo argued for a limited governmental role focused on essential functions like security and order In contrast, nineteenth-century liberal John Stuart Mill proposed a more active state role in addressing social inequalities, advocating for the provision of services such as education for the disadvantaged.
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In the realm of international political economy, liberalism advocates for free trade among nations, which significantly shapes the global economy today The framework of international trade is founded on free trade principles, allowing capital to flow effortlessly across borders and facilitating the liberalization of various economic activities (O'Brien & Williams, 2004).
The structuralist approach, also known as the critical approach, is a prominent theoretical framework in International Political Economy (IPE) that challenges existing world structures with the aim of enacting change (O'Brien & Williams, 2004; Gill & Law, 1988) This approach, grounded in Marxist theories, seeks to address significant structural issues often ignored by mercantilism and liberalism (O'Brien & Williams, 2004; Balaam & Veseth, 1996; Gill & Law, 1988) Beyond its Marxist roots, the structuralist approach encompasses various theories, including neo-Gramscian, feminist, and environmental perspectives.
The structuralist approach in international political economy views the global economic structure as inherently conflictual and hierarchical, favoring global capital, Western interests, and the United States as the leading capitalist power (O'Brien & Williams, 2004) In this framework, economic relations are perceived as a zero-sum game due to the fundamental conflicts within the global economy This perspective emphasizes that conflicts arise both within and between states, highlighting the opposition between dominant forces and subordinate classes (O'Brien & Williams, 2004).
The three economic perspectives share similarities in their focus on power, wealth, production, and distribution, yet they also exhibit distinct differences Mercantilism, in particular, emphasizes wealth accumulation through the export of resources, setting it apart from the other two perspectives, which prioritize market development, technology, and production Additionally, while mercantilism and structuralism advocate for state control, the third perspective diverges from this view, highlighting contrasting attitudes towards government intervention in the economy.
Supporters of liberalism strongly oppose control, highlighting the ongoing relevance of both liberalism and structuralism in today's world The effectiveness of these two perspectives remains uncertain, leading to ongoing debates among scholars and practitioners.
This article examines the historical milestones of the trade relationship between the US and China, highlighting the causes, methods, and repercussions of the ongoing trade war It will also explore the actions and policies implemented to mitigate the impacts on production and trade resulting from this conflict.
We clarify the ways regulations, laws, financial barriers, globalization stemming from the US-China trade war affecting the movement of money.
We discuss intellectual property, technology transfer between countries through international trade relations Its effect on security, production and trade, finance and monetary.
We consider the economic contradictions between countries that are always accompanied by the risk of war, domestic and international security.
1.2.3 Four levels of analysis in IPE
This is the narrowest level of analysis, explaining why an individual (usually the head of a country) chooses a particular policy This level emphasizes the psychology and choices of policy makers.
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This level looks at how different governments/parties within a country affect how that country interacts with other countries.
This level examines whether the relative balance of political, military, and economic power affects the likelihood of conflict, prospects for cooperation, etc.
These are important global factors such as changes in technology, commodity prices, climate creating barriers and opportunities for all countries.
ANALYSIS OF THE GLOBAL POLITICAL ECONOMIC IMPACTS
Overview of the US-China trade war
2.1.1 Causes of US-China trade war
The trade war aims to reduce the significant $796 billion US trade deficit, with China responsible for $376 billion, nearly half of this figure The United States recognizes various trade issues with China, particularly the persistent trade balance deficit, which has been a growing concern for decades Although the trade deficit with China hit a historic low in May 2019, the US continues to view its trading relationship with China as "unfair."
The trade war aims to diminish China's high-tech capabilities, as the US expresses dissatisfaction with China's demands for joint ventures that facilitate technology transfer in exchange for authorized share capital in local firms Additionally, the issue of Chinese public investment fostering unfair competition in global markets remains a contentious point in the ongoing trade dispute.
China's successful implementation of a strategic plan for production modernization has prompted the US to respond by increasing import tariffs on electronic products from China, including telecommunications and network equipment, by up to 25% This move comes amid China's growing production of robots, lithium batteries, and other technological advancements.
The trade war is supposed to prevent the growth of China’s military strength.
Markov asserts that the United States must not allow China to gain military superiority, prompting the US to implement strategies to maintain its competitive edge in national security and restrict China's access to American dual-use technologies He emphasizes that the ongoing trade war stems from economic challenges rather than political containment efforts.
2.1.2 US-China trade war timeline
Date Progression of the Trade War
July 06, 2018 The first round of China-specific tariffs implemented, with a 25 percent tariff on 818 imported Chinese products China retaliated by imposing a 25 percent tariff on 545 American goods.
August, 2018 China made two more WTO claims concerning the U.S.‟ safeguard duties on imports The Trump administration decided to impose a
25 percent hike of tariffs on yet another 16 billion USD worth of Chinese goods The second round of tariffs was imposed on August
September, Third round of tariffs, 10 percent on 200 billion USD, imposed on
2018 China on September China then produced a tariff list 10 percent on
60 billion USD China released its first White Paper with its official stance on the situation.
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In October, President Xi and Trump resumed discussions in preparation for the G-20 summit By November, they reached a temporary 90-day truce, during which China pledged to purchase a significant volume of American exports.
In 2018, efforts were made to narrow the trade gap between the U.S and China, as Beijing temporarily lifted restrictions on American energy, cars, and soy products by mid-December However, the U.S did not reciprocate with any changes, and officials warned of impending tariff increases if a deal was not reached by the end of the 90-day grace period.
In June 2019, the fourth round of tariffs was implemented, raising duties by 25 percent on $200 billion worth of imported Chinese goods and 25 percent on $60 billion of imported U.S products This escalation was justified by the claim that China had failed to uphold previously agreed-upon trade agreements.
September, Fifth round of tariffs, China imposed 5 % to 10 % tariffs on one-
In 2019, the United States implemented a 15% tariff on approximately $112 billion worth of Chinese imports, affecting a significant portion of consumer goods As a result, over two-thirds of the 5,078 goods imported from China were subjected to these tariffs, highlighting the ongoing trade tensions between the two countries.
October, 2019 The United States and China had reached a tentative agreement for the "first phase" of a trade deal, with China agreeing to buy up to
$50 billion in American farm products, and to accept more American financial services in their market, with the United States agreeing to suspend new tariffs.
January 15, U.S President Donald Trump and China's Vice Premier Liu He
2020 signed the US-China Phase One trade deal in Washington DC The
"Economic and Trade Agreement between the United States of America and the People’s Republic of China" is set to take effect from 14 February 2020 and focuses on intellectual property rights,
Technology transfer plays a crucial role in enhancing food and agricultural products, along with financial services Addressing exchange rate issues and promoting transparency are essential for expanding trade Additionally, it is important to consider bilateral evaluation and dispute resolution procedures to ensure effective collaboration.
May 12, 2020 China announced a second round of tariff exclusions for 79
American imports, including ores, chemicals, and certain medical supplies.
September 1, Several dozens of Chinese imports into the United States, including
2020 disposable facemasks, respirators, Bluetooth tracking devices, and musical instruments, have been granted temporary extensions to existing tax exemptions until the end of 2020.
February 18, USTR According to Katherine Tai, the Biden administration will 2021 – October 'leave the possibility of new exclusion processes open, as some
4, 2021 tariffs are inflicting significant commercial harm to US interests.
November 15, In a video conversation, Chinese President Xi Jinping meets the US
2021 virtually counterpart Joe Biden amid deepening US-China divide.
December, Phase One trade deal expired.
Economic and political impacts of the trade war on a global scale
The occurrence of a trade war impacts not just the involved nations but the entire global economy, affecting the livelihoods of people worldwide When one country imposes tariffs and trade restrictions in retaliation, it leads to increased prices for goods, causing significant losses for some nations while others may benefit This interconnectedness highlights the complex dynamics of international trade and its implications for global prosperity.
13 download by : skknchat@gmail.com disputes are always a controversial topic that many countries as well as economists interested in.
The trade dispute between China and the United States began in 2018 when President Donald Trump implemented tariffs on major imports such as washing machines, solar panels, steel, and aluminum, primarily targeting China In September 2018, the U.S imposed tariffs on $200 billion worth of Chinese goods, ranging from 10% to 20%, prompting China to retaliate with tariffs on approximately $100 billion of U.S agricultural exports Although an agreement was reached in January 2020 to prevent further tariff escalations, the existing tariffs remained in effect as of 2021.
The US-China trade war has significantly impacted the economies of the United States and China, along with major economies like Mexico, the European Union (EU), and Canada This conflict has resulted in decreased import and export trade values, contributing to a decline in key economic indicators such as GDP and CPI, and has exacerbated issues like unemployment This research paper will explore the critical effects of the US-China trade war on the global economy.
• Reducing trade flow between China, the United States, and some countries:
The US-China trade relationship has significantly deteriorated over the past few decades, primarily due to the imposition of high tariffs and various trading issues This trade war has led to a notable decline in the US market's share of Chinese imports and a decrease in American consumption of Chinese products.
US manufacturers have experienced a significant decline of over 25% compared to the previous year, while exports to China have dropped by more than $100 billion As of November 2019, the trade deficit between the US and China stood at $360 billion, highlighting ongoing trade tensions that impact both manufacturing and service sectors involved in international trade Smaller companies, lacking the financial resources to navigate the crisis, have been forced to shut down, while larger distributors are seeking strategies to cut costs or adjust pricing This situation is further complicated by the rapid decentralization of trade practices.
The ongoing trade dispute has led to a decrease in demand for goods, resulting in high prices and diminished motivation for trading This situation continues to deteriorate as the lack of market activity exacerbates the economic challenges.
Trade disputes between the US and China are impacting not only the two largest economies but also numerous Asian and European nations Countries like South Korea, Malaysia, Taiwan, and Singapore are particularly vulnerable due to their high trade openness and strong integration in global supply chains.
Import values from the European Union (EU) have remained nearly stagnant, experiencing an average annual growth rate exceeding 10% Overall, the rise in tariffs imposed by Chinese and American companies has adversely affected their businesses.
• Increasing the price and decreasing the demand:
In the United States, tariff increases act like sales taxes on imported goods, leading to higher costs for American consumers and manufacturers This rise in prices negatively impacts competitiveness and diminishes demand for products, ultimately resulting in a decline in the total volume of imports and exports.
Despite the rise in tariffs on Chinese goods, the impact on manufacturers has been minimal due to the Chinese government's exemptions on certain intermediate inputs This strategy has helped stabilize prices and lessen the burden on both consumers and manufacturers in China Additionally, China has successfully increased its market share in alternative markets, contributing to its continued export growth.
• Global GDP growth slows down:
The ongoing trade dispute between the United States and China has intensified as the US imposes tariffs on Chinese imports Exports from the US to China represent less than 1% of the US GDP and 8% of its total exports, while China's exports to the US constitute nearly 4% of its GDP and 20% of its total exports This imbalance highlights the significant impact of the trade relationship on both economies.
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The trade war between the US and China has significantly impacted both economies, with the US accounting for 3% of China's GDP While it's believed that China suffers more losses, the trade conflict has led to a GDP decline of approximately 5.5% for China and 3.6% for the US By the end of 2019, both nations had implemented 20% import tariffs on over 60% of their bilateral merchandise trade, contributing to a global GDP growth reduction of around 0.5 percentage points in that year.
Figure: World GDP growth affected by US-China Trade War
Source: Knoema, World Bank data
The slowdown in global growth is significantly shaped by economic policy responses, particularly the effectiveness of monetary and fiscal stimulus measures in bolstering the economy.
• US’s manufacturing export suffered a big loss:
The Chinese government's retaliatory tariffs have significantly impacted the US manufacturing sector, primarily because many American companies rely on imported raw materials from China for their production processes The escalating tensions between the US and China compel these companies, along with other major economies like the EU, to either absorb higher tax burdens or seek alternative sources, both of which substantially raise operational costs.
16 download by : skknchat@gmail.com and bring disadvantages for the development of many companies in manufacturing industries.
US manufacturers have experienced a significant decline in their market share in China following the imposition of high tariffs on Chinese goods, which prompted China to retaliate with its own tariffs Consequently, these companies have not only lost their domestic market in the US but also their foothold in the international market in China Additionally, their competitiveness has diminished in comparison to third countries due to excessively high production costs and an inability to adjust to rising input prices.
• A decrease in financial and currency market:
Evaluation
The ongoing battle arises from economic trends influenced by policy shifts, populist ideologies, and emerging protectionism rooted in global geo-economic and geopolitical dynamics As one party enacts measures against another, the response involves proportional actions, leading to an escalation of mutual sanctions that extend into various sectors.
In today's globalized economy, a bilateral trade war between major powers significantly impacts other nations, as each side seeks to rally allies and exert influence The conflict between these economic giants reverberates worldwide, evident when stock indices globally fell sharply following Trump's tariff imposition on Chinese goods This trade war poses a threat to the global economy, prompting countries to prioritize their own interests, which further spreads the repercussions of the conflict.
The ongoing trade war between the United States and China has severely impacted the global economy, contributing to a slowdown in global GDP growth This downturn comes as the world continues to grapple with the aftermath of the 2008 financial crisis, alongside transformative shifts brought about by the Fourth Industrial Revolution and the Green Revolution.
The transition of geoeconomics from the North Atlantic to the Pacific is a fundamental issue, highlighting the importance the US places on this shift.
22 download by : skknchat@gmail.com if it wants to maintain its position as the world's top economic power, it must first show its presence in the Pacific.
The United States perceives China as the primary cause of its trade challenges and significant trade deficit, raising concerns beyond trade to include economic restructuring and industrial strategy China's robust manufacturing sector has intensified competition with American products, positioning it as a key player in the global economy through its dual axes of influence.
Developed nations, particularly the United States, face significant competition from China, which often sells products at lower prices to capture market share Additionally, China utilizes its "One Belt, One Road" initiative and free trade agreements with neighboring countries to strengthen economic ties and expand its influence in the region.
The United States aims to maintain its dominance in the global economy by minimizing competition from China in emerging technological sectors and beyond Imposing tariffs and trade restrictions on China represents only the beginning of the US's broader strategy to achieve its long-term economic and political goals.
RECOMMENDATIONS AND FORECAST
Actions have been done in order to de-escalate the trade war
On January 15, 2020, President Donald Trump and China's Vice Premier Liu He formalized a "Phase One" trade agreement, aimed at alleviating trade tensions that have persisted since March 2018.
In a significant concession, the Trump Administration reduced tariffs on $120 billion of U.S imports from China from 15 percent to 7.5 percent, effective January 15 Additionally, the administration suspended planned tariffs on approximately $180 billion of imports that were scheduled to be implemented in mid-December 2019.
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Council Customs Tariff Commission suspended its additional tariffs to be implemented in mid-December, and it continued to suspend retaliatory tariffs on U.S auto exports it had planned to reimpose.
The agreement requires China to increase purchases of U.S products by at least
China has pledged to increase its purchases by $200 billion compared to 2017 levels, with allocations of $76.7 billion in 2020 and $123.3 billion in 2021 This commitment includes an additional $77.7 billion in manufactured goods, $52.4 billion in energy, and $32 billion in agricultural products.
$37.9 billion in services The deal includes a detailed appendix identifying specific products in each category
• China Makes New Promises on IP and Technology Transfer
The Phase One agreement opens with chapters on IP and technology transfer, addressing issues at the core of the USTR’s March 2018 Section 301 investigation For
The article highlights that China's approach to intellectual property (IP) is shifting towards aligning its administration of the IP lifecycle—covering patenting, licensing, and enforcement—with international standards typical of developed nations Key provisions aim to foster fair competition for foreign companies and enhance protections in lucrative sectors like pharmaceuticals Although the IP chapter lacks specific monitoring or enforcement mechanisms beyond the general dispute resolution outlined in Chapter 7, it mandates that China submit an action plan within 30 days of signing the agreement, detailing how it will fulfill its commitments along with a timeline for implementation.
• U.S Financial Services Providers to Get More Access
Chapter 4 of the Phase One agreement lays out each country’s commitments for the financial services sector China promised to remove restrictions on investment, reduce burdensome regulation, and expeditiously review pending license applications of U.S companies in its domestic banking, credit rating, electronic payments, asset management, insurance and securities industries The United States reaffirmed its
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• Reduced Barriers to U.S Food and Agricultural Products
Agricultural exports are a significant part of U.S trade with China, yet China has historically imposed nontariff barriers on higher-value products like processed meats and organic produce However, a new agreement allows for the importation of beef, pork, and processed meats into China, provided they meet the U.S FDA's inspection standards Additionally, China has pledged to shorten the approval period for genetically modified products to no more than 24 months, a significant reduction from the previous five to seven years.
3.1.2 Biden Administration’s strategic plan on reformulating U.S -China trade policy
On October 4, 2021, U.S Trade Representative Katherine Tai unveiled the Biden Administration's strategic plan to reformulate trade policy with China This plan aims to enhance U.S.-China trade relations by fostering resilience and competitiveness, while also collaborating with allies to diversify markets and mitigate the adverse effects of Beijing's harmful practices.
The plan outlines, in order, four steps the Biden Administration will take in the coming months:
• Revisit the “Phase One” trade deal originally negotiated under the Trump
Administration and “emphasize” that China holds up its end to the agreement.
• Reinstate a “targeted” Section 301 tariffs exclusion process.
• Continue high level discussions with China to address more and broader trade concerns.
• Work more closely with allies to counter China’s unfair trade practices.
Although the plan outlines the steps, it provides little detail on how USTR and the Biden Administration will implement them This lack of specificity suggests much
The Biden Administration's approach to China's trade strategy remains undecided, hinging on the results of preliminary evaluations However, the outlined aspects of the plan suggest a continuation of the protectionist trade policies established during the Trump Administration.
Forecast
The trade war between the US and China looks likely to continue in 2022 The
“phase 1” deal between the two nations, in which China had agreed to increase its purchases of certain US goods and services by a combined US$200 billion over 2020 and
As of the end of November 2021, international trade fell short of its target by approximately 40% With the expiration of the current deal, the crucial question for 2022 is whether a new agreement will be established.
The "phase 2" deal regarding US-China relations continues to reflect a Trump-era strategy, as the Biden administration has not made significant concessions to China since taking office This situation leaves little room for optimism about future negotiations.
Relations between the United States and China have become increasingly tense over the past four years, with both nations locked in serious economic and geopolitical competition that is expected to escalate The rivalry peaked in 2021, characterized by heightened trade, defense, and diplomatic tensions As the United States approaches pivotal mid-term elections, both Democrats and Republicans share a consensus on the need for a tough stance against China Meanwhile, President Xi Jinping is poised to strengthen his grip on power during the upcoming party congress in October, supported by the Communist Party's commitment to his hard-line policies.
Cybersecurity is becoming increasingly significant, influencing economic and strategic policies worldwide In 2021, the US accused China of orchestrating extensive data hacks and has since opposed the global rollout of Chinese advanced communications technology, particularly 5G This trend of isolating Chinese technology is expected to persist into 2022, as the US continues to impose challenges on Chinese companies seeking to obtain essential US-made hardware.
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The ongoing trade war between the United States and China remains tense, with President Biden maintaining sanctions initiated during Trump's administration Key measures include keeping tariffs on 70% of China's exports, valued at approximately $370 billion, and closely scrutinizing Chinese student visas The US has also dismissed lawsuits from three major Chinese telecom firms, upholding Trump's directive for their delisting from US stock exchanges Biden has intensified export restrictions on China, leveraging human rights violations to impose penalties on 311 Chinese companies in Xinjiang Additionally, he has restricted domestic investments in Chinese firms, limiting their capital-raising opportunities in the US market The US government is incentivizing small and medium-sized telecom operators to transition away from Chinese equipment Overall, the Biden administration's robust stance against China mirrors and expands upon the policies of the previous administration, with initiatives like the "United States Innovation and Competition Act of 2021" further supporting key industries.
The United States is leveraging subsidies as a rationale for its actions, which may provoke retaliation from China This escalation could lead to an increase in punitive tariffs imposed by both nations, prolonging the ongoing economic and trade conflict between the U.S and China.
The ongoing trade conflict between the United States and China is likely to evolve into a "Technology Cold War," adversely affecting Chinese companies President Biden has adopted a firm stance inherited from the previous administration, employing a "decoupling" strategy to address China's economic ambitions and technology transfer issues Current US restrictions on companies like Huawei, ZTE, Xiaomi, and the Chinese app TikTok are expected to continue and possibly intensify The US Commerce Secretary has pledged to maximize efforts to protect American communications networks from Chinese interference President Biden emphasizes the importance of establishing legal and ethical standards for emerging technologies to prevent a detrimental competitive race with nations like Russia.
China control the norms of the digital era This might be an impediment to China's 27 download by : skknchat@gmail.com
"Made in China 2025" plan, which prioritizes new-generation information and telecommunications technologies to assist the nation achieve its goal of becoming the world's top technological powerhouse.
Tensions between the US and China are easing, highlighted by recent meetings between senior officials and the release of Huawei CFO Meng Wanzhou, who returned to China after nearly three years of house arrest in Canada Meng's detention in December 2018 was at the request of the United States, and her release followed a phone call where President Xi urged President Biden to resolve her situation This agreement may signal potential collaboration between the two nations, indicating a willingness to address concerns through dialogue rather than confrontation Meng's release resolves a significant point of contention, paving the way for further cooperation on issues like the tariffs imposed by former President Trump in 2018, as US Trade Representative Katherine Tai noted that the administration is conducting a strategic review to create a flexible trade policy.
China has several practical strategies for de-escalating the ongoing crisis, including engaging non-geopolitical entities like the European Union and multinational corporations to explore constructive actions that align with global interests without appearing to concede to the US Additionally, China should consider adjusting its foreign policy objectives by accelerating the reduction of its external surplus Furthermore, making unilateral concessions on challenging issues could serve as a preliminary step toward reforming the World Trade Organization, which, despite potential short-term challenges, is likely to yield long-term benefits for China.
In summary, the escalating tensions of the US-China trade war are likely to persist due to ongoing economic and trade disputes that remain unresolved China's commitment to its "Made in China" strategic plan further complicates the path toward a mutually beneficial agreement.
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In 2025, the United States aims to establish itself as the leading global technology superpower, especially in telecommunications, while viewing China as its most significant adversary due to its immense economic strength Under President Biden's administration, the U.S strategy will focus on a balanced approach that combines selective restraint with collaboration, rather than pursuing outright confrontation with China.
It can be said that Trump is irrationally tough to China, and Biden is rationally tough.
Recommendations for Vietnam
The US-China trade war presents Vietnam with a valuable opportunity to enhance its institutions and address legal deficiencies To effectively navigate this situation, Vietnam must review its legislation and policies to ensure it possesses the necessary tools to manage imported goods and respond to fluctuations in the global market Additionally, by monitoring the protection measures of other countries, Vietnam can swiftly develop effective response strategies.
Vietnam must proactively address the potential exchange rate volatility between the Yuan and the US Dollar, which could negatively impact its trade This requires the State Bank to implement a range of monetary policy tools to stabilize the market and promote macroeconomic stability Additionally, it is crucial to closely monitor developments, including updates on commodities affected by US and Chinese tariffs, as well as fluctuations in the exchange rates, enabling businesses to respond swiftly to changing conditions.
Vietnam should uphold policies that foster a favorable business and investment climate, capitalizing on its strategic geographic position to attract multinational firms seeking alternatives to China's manufacturing capabilities for the US market By forging connections with major global investors, Vietnam can enhance its investment landscape and leverage the opportunities arising from shifts in the Chinese market.
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Vietnam needs to enhance its oversight and management of foreign-invested projects Additionally, the ongoing restructuring of regional supply chains presents a prime opportunity for Vietnam to attract supply chains that align with its long-term development objectives.
To effectively mitigate the adverse effects of the trade war, Vietnamese enterprises must collaborate with the government by leveraging the benefits of signed Free Trade Agreements (FTAs) to access significant markets This includes reducing imports from China, particularly in high-tech products, while increasing imports from the US Additionally, as the EU-FTA comes into effect, businesses should focus on boosting exports to the EU alongside the US Improving the competitiveness of domestic production is essential; this can be achieved by enhancing product quality, diversifying designs, and establishing reasonable pricing Furthermore, enterprises should optimize management and supply chain processes to maximize the utilization of FTA incentives Lastly, maintaining a strategy of co-opetition—balancing cooperation and competition—will be crucial for success.
The US-China trade war, which began in 2018, marked a significant turning point with far-reaching effects on the global economy Historically, the United States has held the title of the world's foremost economic power; however, China's recent economic ascent threatens this dominance Consequently, the dynamics of US-China relations across various sectors have become a focal point for debate and analysis.
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The US-China trade war has significantly influenced the global political economy, creating both opportunities and challenges for nations worldwide Key issues arising from this conflict include trade deficits, forced technology transfers, intellectual property protection, cybersecurity concerns, and the "Made in China 2025" initiative In this context, it is crucial for the Vietnamese government and businesses to adopt strategic measures to capitalize on these opportunities while ensuring national security and fostering economic growth.
Despite ongoing negotiations between the US and China aimed at achieving mutually beneficial agreements, the trade war shows no signs of resolution due to various subjective and objective factors The United States, maintaining its economic supremacy, views China as its most formidable rival However, under President Joe Biden's administration, the US is adopting a nuanced approach that blends selective restrictions with partnership, focusing on a flexible trade strategy instead of outright conflict with China.
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Cuộc chiến thương mại giữa Mỹ và Trung Quốc đã tạo ra những tác động sâu rộng đến nền kinh tế toàn cầu Sự gia tăng thuế quan và các biện pháp thương mại đã làm thay đổi cách thức giao thương giữa hai quốc gia này, ảnh hưởng đến chuỗi cung ứng và giá cả hàng hóa Đồng thời, cuộc chiến này cũng đã làm gia tăng căng thẳng chính trị và tạo ra những lo ngại về an ninh kinh tế Các doanh nghiệp và nhà đầu tư đang phải điều chỉnh chiến lược của mình để thích ứng với tình hình mới, trong khi người tiêu dùng cũng phải đối mặt với những thay đổi về giá cả và sự sẵn có của sản phẩm.
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