What's Driving Trade Tensions Between the U.S. and China

Details: Published on Sunday, 29 November -0001 16:00; Written by editor

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A Socialist Project e-bulletin ... No. 1596 ... April 27, 2018
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What’s Driving Trade Tensions Between the U.S. and China

Marty Hart-Landsberg

There is a lot of concern over the possibility of a trade war between China and the USA. In early April, U.S. President Donald Trump announced that his administration was considering levying $100-billion of additional tariffs on Chinese exports, after the Chinese government responded to a previously proposed U.S. tariff hike on Chinese goods of $50-billion by announcing its own equivalent tariff hikes on U.S. exports. And the Chinese government has made it clear it will again respond in kind if these new tariffs are actually imposed.

So, what’s it all about?

To this point, it is worth emphasizing that no new tariffs have in fact been levied, by either the U.S.... or Chinese governments. The first round of announced U.S. tariffs on Chinese goods are still subject to a public comment period before becoming effective, and the content of the second round has yet to be formally decided upon. Thus, both countries have time to back away from their threats.

Also significant is the fact that both countries are being careful about the products they are threatening to tax. For example, the Trump administration has carefully avoided talking about placing tariffs on computers or cell phones, two of the biggest U.S. imports from China. The U.S. has also refrained from putting tariffs on clothing, shoes, and furniture, also major imports from China.