US-China trade war: How did it start, how much is at stake and what happened at the 2019 G20 summit?


HOPES are high talks will resume in June between the US and China over their ongoing trade war dispute.

The two world powers are currently locked in an increasingly bitter row over trade deals with both sides threatening to hike tariffs on their respective imports.

Trump is confident he can win the trade war with China
AP:Associated Press

How did the US-China trade war start?

The basis for the dispute lies with the US President Donald Trump wanting to “Make America Great Again” and part of that is to redress what he sees as unfair trade deals the US has agreed to in the past.

He wants to bring more production back into the country as a way to protect US jobs, he believes such past agreements have been a rip-off for the US.

During the 2016 election campaign, Trump accused Beijing of “raping” US workers.

The Chinese Premier Xi Jinping is also a leader who is said to not want to be seen to back down with both leaders seeing the honour of their nation at stake.

Chinese leader Xi Jinping has said he won't back down in the dispute
Chinese leader Xi Jinping has said he won’t back down in the dispute
AP:Associated Press

How much is at stake?

Words turned to action on July 6, 2018, when both sides levied tariffs on $34bn worth of goods.

This was then increased by $16bn by both sides on August 23, 2018.

The stakes were raised yet again on September 17, 2018, when the US imposed $200bn at a rate of 10 per cent while China was more cautious imposing the same rate but on $60bn.

A ceasefire of sorts was then introduced in December 2018 with the two sides agreeing to start negotiations and tariffs were paused.

But despite numerous rounds of talks no agreement has been reached and the US then said it would raise tariffs on $200bn of China goods to 25 per cent.

On May 13, 2019, China said it would increase tariffs on £46bn ($60bn) of US exports, which caused stock markets to tumble.

A lengthy trade dispute could see both economies adversely affected
AP:Associated Press

The Sun has reported that a US tax of 25 per cent on Chinese-made goods would mean the cost of an iPhone XS would rise by £124.

President Trump has put a lot of weight behind his economic record and believes his track record could see him re-elected and boost his view of himself being a master deal maker.

But any prolonged trade war could see both economies affected with inflationary pressures creeping in as prices rise.

That too could have a knock-on effect to other countries that deal heavily with either the US or China.

There are also non-economic factors at stake, with both Trump and Xi wanting to be seen as strong leaders.

Trump has has declared a national emergency over threats against US technology – paving the way for a ban on Chinese firm Huawei.

On May 15, he signed an executive order effectively barring US companies from using foreign telecoms believed to pose a security risk to the country.

Trump did not name any company specifically in the order.

But analysts have suggested it is mainly directed at Chinese telecommunications giant Huawei.

US officials have previously labelled Huawei a “threat” and actively lobbied allies to not using Huawei network equipment in next generation 5G networks.

Washington believes equipment made by Huawei, the world’s third largest smartphone maker, could be used by the Chinese state to spy.

Huawei has repeatedly denied these allegations.

A Beijing propaganda campaign has branded the US as evil bullies as Trump threatened to hit China with “at least” another $300bn worth of goods on June 6.


US President Donald Trump with Japanese PM Shinzo Abe at the G20 summit in Osaka, Japan[/caption]

What happened at the 2019 G20 summit?

Trump demanded his allies cough up more military cash before his crunch meeting with Vladimir Putin at the G20 summit in Japan.

President Trump first met with host Japanese Prime Minister Shinzo Abe as the summit kicked off on Friday – just days after he blasted the US-Japan security pact as unbalanced.

As he sat opposite Mr Abe in Osaka this morning, Trump said: “We’ll be discussing trade, we’ll be discussing military.”

The pair have enjoyed a close friendship since President Trump took office.

Trump joked about his previous trip to Japan in May – when he presented an award to a sumo wrestling champion in Tokyo.

But earlier this week, the president criticised what he characterised as an unfair security partnership.

The US has committed to defending Japan – which renounced the right to wage war after its defeat in World War Two.

Japan in return provides military bases that Washington uses to project power deep into Asia.

Trump used “power flexing” in a bid to intimidate the Chinese leader Xi Jinping when the pair met at the G20 summit, according to a body language expert.

The US president displayed a “state of aggressive arousal”, says Judi James, as he sought to assert himself at the beginning of their crunch trade talks.

Trump will later hold his first meeting with Russia’s Vladimir Putin since US special counsel Robert Mueller found extensive evidence of Russian meddling in the 2016 US election.

The US president was in a state of ‘aggressive arousal’
AP:Associated Press



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