On August 23rd, a new exchange of tariffs took place in the US-China Trade war.
The imposition of tariffs happened while talks between the US and China over the dispute are taking place. U.S. and Chinese officials met on August 22nd in Washington for a new round of trade talks, however an easy compromise is not expected, as cited by CNBC.
Donald Trump, cited by CNBC, on August 21st said that he did not “anticipate much” from the talks led by U.S. Treasury Under Secretary David Malpass and Chinese Commerce Vice Minister Wang Shouwen.
The US imposed 25% tariffs on another $16 billion of Chinese goods, affecting 279 products including chemical products, motorcycles, speedometers and antennas.
China retaliated immediately with 25% tariffs on an equal amount of US goods, a list of 333 products, including coal, copper scrap, fuel, steel products, buses and medical equipment.
The Chinese Ministry of Commerce released a statement saying that China “has to continue to make necessary counterattacks,” while also stating that it plans to file a complaint to the World Trade Organization.
China and the US have now imposed tariffs on $50 billion of each other’s goods in the dispute. The trade war was initiated by the Trump Administration which is attempting to punish China for alleged unfair trade practices, such as stealing intellectual property. The first round of tariffs went into effect on July 6th.
The US has also threatened to impose 25% tariffs on a further $200 billion of Chinese goods, while Beijing has responded with a retaliation of tariffs on a further $60 billion of US goods. It’s harder for China to match this latest threat dollar-for-dollar because the United States exports far less to China.
Donald Trump has gone as far as threaten 25% tariffs on $500 billion of Chinese goods, which is almost the entire Chinese export to the US.
The Guardian cited an editorial in the state-run tabloid Global Times on August 23rd criticized the US for “breaking agreements and creating trade conflict” but placed the US-China trade war in the broader context of US disputes with the EU, Canada, and Mexico. “The US is moving further towards unilateralism,” the paper said.
Apart from trade, another cause of tensions between the US and China is Beijing’s continuing expansion of presence in the South China Sea. The US have attempted to deter the expansion by organizing military exercises in the region as well as patrol missions, however they have all proved ineffective.
The Diplomat, in an article from August 21st argued that Donald Trump has a tendency of linking trade and security which could lead him to the conviction to attempt to press China on the South China Sea, in combination with the trade issues. “Could the Trump administration successfully link trade war with active steps against China’s encroachment upon the South China Sea? Would it try? Trump has thus far sent mixed signals on the South China Sea, and administration policy may depend more on infighting among his advisers than any strong conviction on the part of the president himself,” reported the Diplomat.
According to the outlet, the attempt to achieve concessions in the South China Sea while pressuring trade will most likely not prove effective.
A military exercise that will take part in the South China Sea and the Indian Ocean will begin on August 26th and will continue until October. The military games will include India, Sri Lanka, Singapore, Indonesia and the Philippines, Japan and the US.
The exercises are sure to anger China. Beijing has built up several artificial islands with military outposts on them in the South China Sea, which includes vital sea lanes through which over $3 trillion in global trade passes each year. China claims the area within its so-called nine-dash line, which encompasses most of the waterway. The Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims. China has said the facilities are for defensive purposes, but some experts say this is part of a concerted bid to cement de facto control over the South China Sea.
The military exercise more than likely aims at targeting China’s attempt to tighten its grip on the South China Sea. That is something the US is strongly against, due to it being a vital global trade route.