The dispute between the United States and China: Two years of trade war: Frosty truce

Two years after the beginning of the trading war of the USA with China, the two largest economies are economies stronger than ever on a collision course.

After punitive tariffs on Goods to the value of hundreds of billions of dollars, countless threats and protracted negotiations, a good weapons seemed to be in the middle of January, finally, standstill closed: The United States and China signed the first part of a comprehensive trade agreement. But the joy did not last long. The originates in China and a novel Coronavirus has forced the world economy to its knees and gave Trump a crisis, the consequences of which could cost him in November, even the election victory.

“The ink was not yet dry on the contract, than the plague, floated come in,” was angry with Trump the last in terms of the Coronavirus. The “China fever” was a “very bad gift” of the Communist leadership in the world, Trump said. “I see the trade agreements a little differently now than three months ago,” said Trump in the garden of the White house. “With China to cope, would be a good thing, but I don’t know if this is going to work,” concluded Trump.

Love sounds different. Since the spread of the coronavirus pandemic, China is again Trumps foreign bogeyman number one. Beijing, in turn, is angered in the face of the blame game. Also, the recently announced sanctions against Hong Kong because of the interference of Beijing in the autonomy of its special administrative region contribute to the tensions. There is a further dispute issues: Visa for journalists and students, the security policy in the Indo-Pacific area, as well as restrictions on technology exports, and passenger flights between the countries, only some of the squabbles are apples.

From the trade war of a kind has become a Cold war: You consider suspicious, make each other allegations and are not familiar with the Partner, but neither side wants to let the conflict escalate again, because the Corona pandemic has weakened both giants.

15. June 2018 all started: With punitive tariffs on imports from China in the amount of 50 billion dollars, Trump made the first shot in a trade war. He wanted to reduce the trade deficit with China and criticized Beijing’s unfair trade methods. The conflict rocked himself up Trump had imposed a year later, almost all of the imports from China worth more than 500 billion US dollars in punitive tariffs – more than Beijing, with counter-tariffs could answer. The exports declined.

The decline in goods flows and the uncertainty due to the trade war dampened global growth. In January, just as the Corona-pandemic began in China, the two sides agreed, at least on a part of the agreement. The core of the promise of China, over two years for 200 billion dollars was to buy more Goods in the United States – especially Oil and Gas (50 billion), industrial goods (80 billion) and Agricultural products (32 billion).

The decline in demand in China and the collapse of world market prices, but now increasingly is in doubt, how the goals can be achieved. Chinese experts already speak of a “force majeure”. Experts from the Peterson Institute for International Economics in Washington came to the conclusion that China has not met its goals so far, even half of that.

“The basis of the agreement, the market economy, not a planned economy,” says Economics Professor Huang Weiping from the people’s University (Renmin Daxue) in Beijing. “If the dealer does not buy, can not to force the Chinese government.” China’s Premier Li Keqiang has assured that to want to work well together. “Both countries gain through cooperation and lose in confrontation.” A decoupling of the two economies would be damaging for both countries and the Rest of the world, he warned.

Trump had originally advertised to always in favour of a comprehensive trade agreement with China. Despite punitive tariffs as a means of pressure Beijing, however, it was not to be intimidated. Trump then had to make a u-turn and the part of the agreement as a success to sell. Critics complained that the Treaty has ultimately solved, especially problems that Trump himself had created. In addition, most of the punitive tariffs will continue to apply – what weakens the growth.

The US government in the question of whether Beijing will fulfill its promises from the part of the agreement, yet, rather, was covered. It seems that it would fuel the trade in conflict again: The economy in the US is not because of the Coronavirus in a severe recession, there are so many unemployed as since decades.

In addition, the conflict with China, Trump is politically useful: He can claim to his constituents that he is “hard to deal with China” and a “good Deal” I reached the United States billions of dispensing. China is Trump a useful image of the enemy: In a campaign video his campaign advertises that Trump is advocating for “factories here to build, rather than in China”. Trump wants to make “America great again” and the like at the expense of China.

Trumps policy has set a dynamic in motion, the experts described with one word: decoupling. China focuses more than ever on its own forces, and also due to the global economic crisis on domestic demand. Because of the US restrictions against Chinese high-tech companies such as Telecom giant Huawei is a boost to in addition, the domestic Innovation, and to become independent of US technology. Some US companies try to turn up in their supply chains to reduce dependence on China.

Until Further notice, is not, however, expect a resumption of the trade conflict, especially as both economies by means of the Corona are weakened by the crisis, as Analyst Eric Robertsen by the Bank, Standard Chartered the news channel CNBC said. The risks would be today, for Trump and China’s state and party chief Xi Jinping significantly larger, he warned. “Both leaders are very careful not to let in an early Phase of the recovery to derail, you are trying to accomplish,” said Robertsen.