Your Quick Primer on the U.S-China Trade Dispute [Infographic]
Trade disputes between the U.S. and China have been up and down for the past three months. This infographic shows how far the U.S.-China trade battle has gone in the first half of 2018.
March 2018: Disputes over tariffs on steel and aluminum imports
President Trump follows tariff recommendations from the commerce department and imposes 10% tariff on imported aluminum and 25% tariff on imported steel. China’s overproduction might be the main rationale behind this move. China calls the tariffs calls the tariffs “a serious attack” on international trade and announces $3 billion in tariffs on the U.S. aluminum and steel imports in response.
April 2018: Sanctions against high-tech products and agricultural commodities
On April 3rd, the U.S. imposes a 25% tariff on $50 billion of goods imported from China containing industrially significant technology. The U.S also accuses Chinese high-tech products of violating intellectual property. At the same time, China announces another $3 billion in tariffs on the U.S. imports, targeting 235 products including agricultural commodities such as fruits, nuts, wine, and soybean. There’s also a 25% tax on eight other the U.S. goods including recycled aluminum and pork. On April 16th, the U.S. bans China’s ZTE Corp. from buying the U.S. technology and imposes fines on the company for violating sanctions against Iran and North Korea.
May 2018: Trade tensions quiets down as talks over North Korea’s denuclearization proceeds
In early May, negotiations about easing the trade war between the U.S. and China begins. However, the White House describes the first round of talks in early May as “frank discussions” since two countries were “far apart” on some issues. On May 14th, the U.S. and China issued a joint agreement stating that both “agreed on meaningful increases in the United States agriculture and energy exports,” bringing temporary relief to a heated trade dispute. The trade war was “put on hold” possibly because the U.S. needs China’s support in putting pressure on North Korea to denuclearize.
June 2018: A new round of trade battle heats up again
On June 15th, President Trump announced new plans to impose 25% tariffs on $50 billion of Chinese imports in retaliation for an “unprecedented level of larceny” of intellectual property. China’s Ministry of Commerce said that all previous agreements are “invalid” now and it would impose trade barriers of the “same scale and the same strength”. On June 18th, President Trump asks his administration to prepare new tariffs on $200 billion in Chinese imports as the two nations moved closer to a potential trade war. In the next day, the Shanghai Composite Index plummeted almost 5 % in intraday trading before paring losses, while a gauge of technology shares sank the most in two years. On June 25th, Chinese yuan weakens to 6.4893 against USD as Chinese investors were spooked by the next round of trade disputes with the U.S.