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The Eagle v. Dragon

A brief of analysis of the U.S - China Trade War

Back in 2018 when the republican party was ruling the United States and Donald J.Trump was still in office, began a trade war between the two most economically prosperous countries: The United States and China. As the war continues and the new Biden administration now in charge this whole ordeal takes a new turn. More on this topic is Perspectoverse’s Arya Pradhan.


President Trump initiated this economic war based on legal rationale like calling Chinese imports a “national security threat” and he followed this statement by imposing tariffs and/or quotas on these imports. The subsequent retaliation by the Chinese government was not only a huge risk to the trade and investment industry but to the global economy as a whole.

When Donald.J.Trump the former U.S head of state initiated this war 3 years ago it pushed the whole world to the edge of their seats. Tension between two nations has never been this high since the cold war. When Biden came into office the public expected his administration to redo what Trump had done, their expectations were also strengthened by the fact that Biden himself had criticized Trump's decisions publicly. This is why his recent announcement came as a shock to them. Recently Biden announced that he would continue the combative economic approach towards China, as a result the trade restrictions imposed by the Trump administration will not be lifted, additionally Biden has also said that he will hold Beijing accountable for all the trade agreements that were made during the previous administration. Comments made in a call with reporters on October 2nd, 2021, further revealed how the new government is planning to deal with the rising economic and security threat from China.

President Biden has indicated that despite his previous criticism of Trump’s methods as too aggressive, he will continue to counter the Chinese economic threats with trade barriers and other punitive methods. These restrictions will also include commitments the Chinese Government agreed to as part of the Phase 1 trade deal which was signed under the Trump administration back in January 2020. This deal intends to increase American investment in Chinese markets, increase farm and energy exports and provide better security for American trade and technology secrets. In return China had agreed to buy $200 billion worth of American goods by this year and ease some of the restrictions it had placed on American products. In the year 2020, China was more than 40% short of its fiscal commitments and as of October they are more than 30% behind this year’s commitments. This is grim news for American companies who were relying on Chinese investment, but what may come as a relief to these companies is a fact that the American government is willing to exclude some of these companies from the imposed tariffs. Further decisions by trade officials will be based on the priorities that the Biden administration sets. Katherine Tai, the trade representative of the United States is expected to further negotiate this deal with her Chinese counterparts in the upcoming days. Officials have also warned the Chinese government of further trade restrictions if they continue to not abide by their deal.

In conclusion, with Biden's new announcement it doesn’t look like the war is going to get resolved any time soon. While the bureaucrats in Beijing and Washington are still arguing over contracts and treaties, it’s the American public who is really starting to feel the brunt of the war. With the inflow of cheap Chinese products restricted, consumer prices have skyrocketed. The Chinese on the other hand has not been suffering as much as their American brethren, Chinese manufacturers have been steadily decreasing the cost of their exports so that even with the addition of tariffs their product will be popular among consumers. This doesn’t mean China is immune to the effects of the war, in 2019 alone China lost $35 billion worth of export and they will lose much more if the war keeps going on. One official of the United Nations Conference on Trade and Development (UNCTAD) has called this war a lose-lose situation, this is an apt description of the ongoing conflict. Imposing treaties and signing commitment deals between the two countries will eventually lead to economic recession on both sides and since both these countries are economic titans the war will have dire effects on everyone. With the way things are, hope is bleak, will they reach a resolution or will we reach the point of economic oblivion? Only time will tell.


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