From April last year to the current year, the announcements and regulations issued by both China and the United States have allowed this trade war to continue and there seems to be no end. This trade war has been going on for a long time, and it has been recently Confrontation in the field. Looking at the U.S. sanctions against Japan that year, we may see some clues.
In April 2017, during the election, Trump called for the return of manufacturing and employment to the United States. He instructed the Ministry of Commerce to investigate whether steel imports from China and other countries to the United States would pose a threat to national security.
In August 2017, Trump once again proposed a clear investigation against China and asked to study China’s unfair trade practices, with particular focus on the issue of stealing American intellectual property rights in China.
The results of the survey initially estimated that China’s stealing of intellectual property rights resulted in 225 billion to 600 billion U.S. damages each year. China’s official media criticized the investigation for poisoning relations between the two countries and criticized Trump’s unilateralism and protectionism.
After several months of silence, in January 2018, solar panels and washing machines were first used. The United States announced a 30% tariff on imported solar panels, most of which came from China. The tax rate for washing machines jumped from 20%. , with Mexico and South Korea also suffered.
On March 9, the United States stated that it would impose high tariffs on imported steel and aluminum.
Beginning in April, it is even more exciting.
On April 2, China counterattacked early in the morning and lifted it up gently. It stated that it imposes tariffs of up to 25% on pork, fruit, nuts, alcohol, etc. originating in the United States, but does not include soybeans.
On April 3, the United States announced the “301 Sanctions List”, which intends to levy tariffs on goods for which China sells about US$50 billion worth of goods, covering 1,300 items and targeting the “Made in China 2025” field;
As China said, "To come and not to be indecent", on April 4th, China immediately counterattacked and decided to impose a 25% tariff on 106 U.S. goods including soybeans and cars.
On the 5th, Trump groaned again and felt angry at China’s response, and stated that he considered additional trade wars and imposed additional tariffs on US$100 billion Chinese imports. The Chinese responded “We do not want to fight, but we are not afraid to fight trade wars.” ."
The war is dazzling, and who will prevail in the end? The total value of US exports to China is about US$130 billion, but China’s exports to the United States are as high as US$505 billion. It is the U.S. advantage that makes Thornpoor’s trade deficit worse. Because this means that if the trade war really starts, the United States has more checklists to deal with.
However, China may have a strong political situation. Xi Jinping has absolute power and means to limit the public’s different opinions. However, Trump’s mid-term elections are also ahead of others. Strong lobby groups line up next to one another. Examining his words and deeds of the news media. If prices rise and high tariffs cause companies to suffer losses, one can imagine the pressure of public opinion will be even greater.
"The two parties will eventually suffer, but politically, China seems to have more room to operate than the United States," said Phil Levy, a senior researcher at the Chicago Council for Global Affairs.
Is it true that China is stealing intellectual property? With the support of the government and funds, Chinese companies are forcing foreign companies wishing to enter China to be established in a joint venture. This forces U.S. companies to share business secrets with Chinese companies, and finally, to grow. China's technology, to replace the U.S. companies, to take profits.
Americans basically agree that this is a problem, but how to deal with controversy.
Will tariffs create jobs in the U.S.? Tariffs must protect some jobs. For example, the steel and aluminum industry, which is ahead of the game, U.S. Steel Company says it will increase the employment of more labor. If it comes from protected industries, if imports come from China. Falling, the U.S. companies that produce these products will theoretically increase production and may increase more employment.
But is it really more damaging to increase the benefits of local employment? This is still an uncertain problem. For example, the use of steel is more than the production of steel companies. The increased employment of the steel industry will be less than that of the auto industry. Is there more employment? Will it raise tariffs and cause greater unemployment?
What is the difference with Japan’s trade war? The trade war has not been lost before. In the 1980s and 1990s, the United States had hands over Japan, and now it is on a par with China. There are actually many similarities.
At that time, the United States applied tariffs to allow Japan to open up the semiconductor market and limit steel exports to the United States. Like today’s China, Japan had a huge trade surplus with the United States at that time, and Japan also adopted an unfair industrial policy to help build its own company to become a global enterprise.
The means by which the United States turned Japan is to use the 301 clause this time, giving the President extensive powers to retaliate against trade disputes through tariffs.
Clyde Prestowitz, president of the American Institute of Economics and Strategy, holds doubts. He believes that "China is a completely different creature."
In fact, not only Japan, the United States also used the 301 clause to pressure India to require Delhi to open its insurance market. India refused to negotiate. At that time, India’s finance minister stated that India’s policy issues are not the United States’ final say.
Now China is more like India than Japan at the time. It has a large population and a vast area. At that time, although Japan resisted the demands of the United States through delays, it still had to bow down, because Japan needs the United States to protect it from China. Japan has never threatened to retaliate against U.S. imports for retaliation. This contrasts sharply with today’s China. China’s mouth is not weak, and the list of counterattacks announced is not polite.
At the time, Japan reduced the smoke of the trade war by letting Japanese auto makers that were driving General Motors’s Ford, setting up factories in the United States, and strengthening investment in the United States. Japanese companies now employ hundreds of thousands of American workers directly in the United States, and Investment nurtures useful political allies, especially Republicans.
It's just that Beijing authorities may not use it. In 2017, China invested about 29 billion U.S. dollars in the United States, which is 1/3 less than in the previous year. The reason is that it is worried about national security. The U.S. continues to increase its investment in preventing China’s investment, M&A, and restrictions on Chinese people. Buy semiconductors and other technology plants.
China has responded to the sensitive parts of the United States, especially the U.S. agriculture and aircraft. Even if China's economy is damaged in doing so, it will be costly. The United States should also lose its grip.
At that time, Japan’s opposition to the United States had reduced the White House’s efforts. In 1995, the Clinton Administration was expecting to impose a 100% tax on Japan’s luxury cars. It is hoped that Japan can buy more American automotive components. Consumers who would buy luxury cars were limited, and Clinton assumed that they should be mostly Republicans, not his voters. But it caused a stir from US car dealers and put pressure on the White House.
In this Sino-U.S. trade war, lobbyists focused on injuries to American farmers who were powerful and politically sympathetic groups. They were also important supporters of the Trump regime. Trump said that there will be plans to protect farmers, but Did not provide any details.
Trump threatened to carry out large-scale retaliation against China, but the people next to it continued to try to disinfect and calm the market, saying that they did not want to fight a trade war. Trump also tweeted: China will make concessions.
In this fight, is it really playing or not? I am afraid that everything will not be clear until late May.
This wave of "301" sanctions list, the US Trade Representative (USTR) will hold a public hearing on May 15, and will not confirm the final product list after May 22, China has not announced the final measure of the list of retaliation and took effect. Time; Before that, there was still space.