America v China: why the trade war won’t end soon | The Economist

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The world’s leading superpowers are locking horns Game on here, trade war between the US and China is here Over the past 16 months America and China have been trading blows… …through tariffs on goods We are looking at a reality that has a 25% tariff on every single product… …that would come in from China The impact is being felt on industries worldwide But what is the story behind the America-China trade war? So the trade war, what have you guys been looking at? The US doesn’t like that China is growing so fast… …and set to overtake America as the biggest economy in the world… …if it hasn’t already by certain measures Basically China and the US are caught in this race… …of imposing tariffs on each other So the US slaps a high tariff on certain products then China retaliates It’s multiple industries across multiple markets, it’s huge And I think right now would be a really good time to look at what’s happened… …how it could impact the world from now on At The Economist, we’ve been covering the trade war extensively Soumaya Keynes is our trade and globalisation editor… …based in Washington, DC How did this whole trade war kick off? How did this whole trade war start? For a long time there have been frustrations that… …past American administrations had with the Chinese On the 2016 presidential campaign trail… …you started to see some really tough rhetoric We can’t continue to allow China to rape our country… …and that’s what they’re doing And so he gets into office, his United States Trade Representative… …that’s the kind of official trade negotiator… …they’re working on this big report So they’re essentially investigating China’s economic practices Essentially the question they’re asking is… …has China done anything that would frustrate America’s economic interests? And they find surprise, surprise—yes How long a history is there of these complaints the US has about China? These concerns go back for a really long time And I think to understand them properly… …you really need to go way back to the expectations that people had… …when China was thinking about entering the World Trade Organisation China’s economic rise has been dramatic In 1978 China’s GDP at market prices was just 6% of America’s Last year it had grown to 66% When considering local spending power… …China has already overtaken America This unprecedented growth began with President Deng Xiaoping He started opening up China’s economy to the world in 1978… …and the country quickly became “the world’s factory” Over the next decade, exports as a share of GDP tripled… …and by 1988 15% of China’s exports went to America The World Trade Organisation opened its doors to China in 2001 And it was America that ushered it in Bringing China into the WTO is a win-win decision It will protect our prosperity and it will promote… …the right kind of change in China After joining the WTO, China became an economic superpower But people had expected the country to also become… …more like a Western capitalist economy That didn’t happen America now claims that China achieved its growth by not playing fair Are those claims justified? To find out the answer, I spoke with David Rennie… …he’s our Beijing bureau chief There’s two ways in which China certainly hasn’t been playing fair One way is just that China treats Chinese companies differently So, if you are a Western business… …your Chinese competitor not only has better market access… …but maybe the land that it built its factory on was given for free… …maybe it got a giant tax break …China just doesn’t have a level playing field There’s then the really dirty stuff: stealing foreign companies’ technology If you asked Chinese officials about the accusation that… …China is stealing its way to the top… …they will say, well hang on, America steals secrets too So why are you coming after us? The American government will tell you sure, they spy and they steal stuff… …but never for commercial purposes With Donald Trump’s election in 2016… …you had a president who actually set about getting tough with China… …once he was in office and we never really had that before The Trump administration has been using tariffs… …or taxes on imported goods… …to try to force the Chinese to change their ways In July 2018 America imposed tariffs of 25%… …on $34bn worth of Chinese products That almost doubled the average tariff rate on Chinese imports… …from 3.8% to 6.7% And it’s American firms that have to pay that tax But with every increase from America, came an increase from China Since the start of the trade war… …China has more than doubled its average tariff rate America’s has tripled The fight has become overtly political… …because China’s tariffs are hitting President Trump’s voter base Many counties where Trump won in the 2016 election were here… …in the Great Plains… …and these are the counties most affected by China’s tariffs Someone who knows all about the impact… …tariffs are having beyond the data… …is Chad Bown from the Peterson Institute for International Economics He’s been analysing international trade for decades… …but the trade war has put his research in the spotlight Some people have referred to it as my World Cup or my Super Bowl It’s something I’ve been studying in the background for 20 years And now all of a sudden the world seems to be interested in this What role do tariffs play in a trade war? Tariffs are basically a tax… …but it’s a tax that’s only paid for goods that are produced… …outside of the country, in a specific place One of the things that China has done in its tariffs is… …it’s imposed really high tariffs on American exports of soyabeans This is a huge product that farmers in Iowa and across the Midwest… …grow only to sell to China So, how are these tariffs and… …the trade war impacting the wider world economy? I think at some level we’re seeing the decisions that businesses make… …be affected by this Nowadays, they’re not sure what markets are going to be open to them… …in the future and that’s going to impact their investment decisions The International Monetary Fund, the IMF… …they expect economic growth to be a lot lower in the future… …because of the tensions arising during the trade war The global economy is slowing down… …and everybody’s increasingly concerned about that As things stand now, a ceasefire in the trade war could be drawing near The two leaders are hoping to agree on a “phase one” deal soon… The two leaders are hoping to agree on a “phase one” deal soon… …which could mean some tariffs being lifted The Trump administration wants China to buy more American produce… …and tighten up their intellectual property rules If that phase one deal is signed… …will it be the beginning of the end of the trade war? I took that question back to Soumaya The Americans are hugely ambitious for the kinds of changes… …that they would want from the Chinese but… …those ambitions I don’t think will be reflected… …in the preliminary phase one deal The Chinese government wants its economy to do well… …wants its citizens to get richer The extent that the Americans persist in demanding these big changes… …to the Chinese economy, it’s going to be really difficult to get a deal Even if there is a phase one deal… …there will be a lot of issues still to be resolved But there’s more to the trade war than just tariffs America has also imposed restrictions on some Chinese firms… …especially ones in the tech industry We cannot allow any other country to outcompete the United States… …in this powerful industry of the future Specifically over one Chinese company Huawei can offer cheaper prices… …because they are heavily subsidised by the Chinese government We’ve made another film that looks closely at Huawei… …and why the West is worried about it It includes a rare interview with Huawei’s CEO Ren Zhengfei I do not really understand America’s political motivation And we looked into how these tensions will impact American industries… …already dependent on Huawei technology The biggest issue, I think, with all of this political turmoil… …surrounding the Huawei name is uncertainty You can watch the Huawei film right now by clicking on the link opposite If you want to learn more about the trade war you can click the other link… …where you’ll find all the research we used to make this film… …as well as other articles we’ve written… …including a special report by David Rennie And as always if you like what you saw, hit that subscribe button

93 comments

  1. I’m so frustrated, I can’t tell if any news or analysis is objective. Excluding any subjectivity toward our current economic climate.

  2. 공작실체의 주범이 청와대의 문재인이다ㆍ모조리 다때려잡는다ㆍ생물테러행위자도 한국인이다ㅈ

  3. It's all about Empire. US companies like DuPont and Nestle unethically destroy the ecosystem of many different countries and poisoned the water supply of their own people and the whole world (thanks for the impending global cancer wave) for their own profits and no one bats an eyelid. Because it is okay if it is US companies which are doing evil things. But when other countries' companies as much as try usurping them, it becomes unacceptable.

    Stop hiding behind ethics and honour when you are as despicable as the enemies you claim to be fighting in the name of your people you are cruelly exploiting/profiteering from.

  4. NO only did it end, now with the Coronavirus hitting China after a cure is found they will  be asking the USA what do you want,..in the Trade deal….

  5. The US is waging a war with China on four fronts: technological, geopolitical, financial, and military. This report fails to provide substantive information.

  6. NOW is the time to improve relations between countries.
    Corona virus is hitting China hard. Trump could offer help by reducing tariffs at this difficult time.
    Time to help each other.

  7. Talking surface stuff. Meanwhile China military launches 90k cyber attacks a year to compromise Pentagon and our military. Didn’t Obama say manufacturing jobs were gone forever? Yet Trump has been growing those jobs significantly. Guess he did have a magic wand.

  8. What kind of foolish researchers do you have? The main reason for trade war wasnt race for trade dominance. China started selling ELV hardware into african union buildings and EU ministries and used these hardware to leak data into private chinese servers, this is considered as espionage. And it has been happening over last 5-6 years this is why US want to limit the supply of tech into such sensitive areas. Ofcourss they wont cite this as a reason.

  9. America is a CANCER and an obsession of China (or Chinese) !
    All their news (CNN) are always talking bad about China and their government always thinking ways to destroy them esp. in Huawei 5G, no wander China is improving years by years while America is falling behind yrs by yrs even in Intellectual property= America is already far behind to countries like Japan, Singapore or even Russia !

  10. Are you going to be doing one based on the Corona virus soon? Or are you waiting until it seems to be getting cleared up before having a video stating its effects or possible effects?

  11. America claims that China achieved its growth by not playing fair??? Loool Americans doing everything for money,they spy with Google all world even their people.Snouden discovered them and he is criminal cuz he discovered true face of goverment.

  12. Americans wants to destroy Chinese economy in order to be number #1.Everybody knows this and u say that China didnt play fair in growing their economy?Nobody plays fair,especially u Americans in order to get more money.Capitalism the true evil of this world.

  13. 看热门评论都觉得这视频质量不高,我看着还行,讲明白了很关键的一点,美国同意中国加入WTO,加入世界贸易,是希望中国在能够提高收入的同时,更加法治,对对私有财产和知识产权的保护更好,以及更自由、开放、流通的社会,以此能反过来进口美国产品,让美国企业在中国有更好的市场,赚更多的利润。然而实际上是,中国加入WTO后收入提高了,后面的那些全没做到。对美国来说unfair

  14. America should QUIT stealing indiAs intellectual propertY america is synthetic  and a thief of achievements inventions to the real country which is indiA'

  15. China would squash America if they could rally everyone in Asia behind them. Asia is gigantic and most of them despise America. As long as you rally Asia behind you, nothing is impossible.

  16. Sorry I am chinese. I don’t feel that people not having civil liberties and the government transforming its people into cattle. And in constant I love my country and my government. Recently, the government has a special notch mask. Local governments have left masks of other local governments with each other, but they have not used any masks mailed or bought by the people.

  17. the report has biased points, the idea is tilted on the western side. Because of poor evidences and lack of sufficient investigation. This is a middle school investigation totally biased point of view. flatterimg US

  18. dude,3:49 only state owned businesses gets free land ok ? And what is wrong with this ? Isn’t it a very normal thing ? Doesn’t it seem to be a regular political policy ?

  19. Apple still loves and greatly benefits from manufacturing in China. iPhone is still the most popular phone in China.

  20. America steal tech and stuff but never for commercial purposes? So what are these for, for saving the world from alien?

  21. This trade war is over technology,
    Intel is finshed (dead) and the Chinese AMD is the new leader in world tech.. helped by (Israel)
    These AMD chips are made in Taiwan and China wants Taiwan… why is this so concerning?
    Military tech and America will not be the head of this tech anymore,
    War is coming!
    As for this Economist channel.. its a Rothchilds funded establishment.

  22. Oh as if the US ever played fair to begin with? When Gadafi tried competing legitely by making an African currency, the US invaded. Now that is far worse then what China is doing!

  23. Looks like Corona Virus is winning, 3,000 plus unconfirmed death.
    The real champion Anti-Pandemic vaccine. All you leaders of the World bow down to your new leader, the Covid-19 vaccine creator!!!!

  24. fine, keep doing trade with infected and defective Chinese products. Next infection from China is the zombie apolcalypse

  25. Simply US is not ready for distraction from China. Not ready that their monopoly in every aspect of industry is disrupted by china. The trade war is beneficial for consumers. In easy words, the trade war is US racism at the very basic. US is not ready if their prosperity will be compromised by other country. Many products from china are cheaper than US counterparts. US charge high price because they want to stay rich…while china attack with lower price and same value per buck ? Who would want to buy those higher priced products if i can buy the cheaper ones ?

  26. As a mainland chinese,I can eat lobster every day,but it would be a pleasure to see Americans consuming dirt even with the cost of I eat potatoes every day

  27. 🔊 💯

    George Washington was inaugurated as the 1st US president on 1789 Apr 30 Thu after Emperor Qianlong had made Cn become one of the almost largest economy countries in 1788.

    Am may sooner or later give Twn back to Cn if Us is no longer interested to be number 1.

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